Posted on 25 February 2011 by Jeanette Mccoshan
I am 63 years old and thinking of retirement next year. My property is valued at £105,000 and has a mortgage of £49,000 with 7 years still to run. Is it possible to transfer my mortgage to interest only in a lifetime mortgage in order to decrease my outgoings on retirement?
I do not think that you will be able to transfer your mortgage to a standard interest only Lifetime mortgage next year. This is because the amount you need to raise is higher than the Equity Release providers would be willing to lend.
In a Lifetime mortgage the interest is not repaid on a monthly basis and instead rolls up and is repaid only on sale of your home or if you move into long term care. Due to your projected lifespan, the value of your home and the size of the mortgage required there would be a very good chance that the total debt would exceed the value of your property and the providers will not allow that.
Fortunately there is one Lender who operates a scheme whereby the interest is repaid each month and so this problem does not arise and I believe you would benefit from speaking to one of our independent mortgage advisers. Please call on 0344 346 3672 and tell the consultant the date of your question, they will be able to look at your situation and advise you accordingly.
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.