Interest only

Posted on 15 November 2011 by Edward


My wife and I have a house valued at £240,000 with a £60,000 interest-only mortgage on it from Santander, they need full repayment at age 75 (we are both 71).  We are now in our second home in Lanzarote for the winter, this property is valued at 150,000 euros and is paid for, the market is too poor to sell so we would like to extend the date for repayment - we have never been in debt or failed to pay our dues.  Our 2 daughters would repay the mortgage on our death.

Edward

I do not think that you will be able to remortgage your property whilst you are based in Lanzarote for the winter and think that you will need to wait until you return to the UK.  As you have at least another 3 years with Santander this should not cause you too many problems.

The majority of UK lenders will also want you to have repaid your mortgage by the age of 75 and there are only a handful who will consider lending beyond this age.  All of these currently want you to have a repayment vehicle in place, so that you can repay the mortgage at the end of the term without having to resort to selling the property.

The most likely way forward for you is to take an equity release mortgage, with these capital is released from your property and then the interest is rolled up until the mortgage is repaid, either on death or if you move into permanent care.  They are only available to UK residents which is why I think you will need to wait until your return.

Peter

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