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.

Peter

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