Lending in retirement

Posted on 10 March 2011 by Paul Carroll

We have extensive very good uk credit ratings.

We have a french property worth £260,000 with a £96,000 interest only mortgage; and a uk property valued middle of last year at £165,000 with an £88,000 capital & interest mortgage.

Our current income from pensions/annuities is £33,600 p.a. and we have a further 4 final-salary pensions worth £13,500 p.a. payable from 2018; the majority of the foregoing are linked to increases in rpi; and a further 2 state pensions worth £10,600 p.a. payable from 2019.

We wish to raise an additional £55,000 and convert all non i-o mortgage debt to interest-only; Repayment vehicle would be the sale of the french house on our eventual return to the uk at age 75.

In theory at a rate of 5% we would be paying approx one third of our current monthly income in interest and our overall ltv would be 57%.  Is this feasible do you think ?

I do not believe that this would be feasible on your current incomes as it would amount to total lending of £239,000 on an income of £33,600. Over 7x income and I do not know of any Lender who will consider this.


Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

You are currently offline. Some pages or content may fail to load.