Raising a Deposit in Retirement

Posted on 6 May 2012 by James

My father is 67 and my mother is 60. Together they have a house worth £350,000, savings of over £400,000 and investment properties worth at least £600,000. They currently have no mortgages. My father has a pension of £30,000pa and they have the rental income of approximately £30,000pa.

They would like to sell their own house and use their savings and buy a house near us they have seen for £1,000,000. To do this, without selling any of their investment properties they have calculated they would need a mortgage of around £250,000. My father is adamant that nobody would give a mortgage to a 67 year old. I can't believe this would apply in their strong financial situation. Would they be able to get a straightforward residential mortgage for this without having to start remortgaging their BTLs etc? Thank you.


There are people who will lend to a 67 year old, especially when the mortage required only represents 25% of the property value.  The question is how would your parents repay the mortgage?  The maximum residential mortgage term that they can get is usually up to age 75 and on a capital repayment basis this would make the monthly payments horrendously expense, yet on a cheaper interest only basis how would they repay the mortage in 8 years time without selling some of their investment properties?

In my opinion they would be better off looking to raise the money against the investment properties.  The maximum term would then run to age 90 which would give them time to repay the capital as well as the interest and there are possible tax benefits to be gained.  They would need to seek independent tax advice about this before deciding how to proceed with any mortgage application.

I believe we can help your parents and that they would benefit from speaking to one of our independent mortgage advisers.  Please ask tehm to call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help them find the right mortgage for their situation.


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.

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