Unlocking Financial Freedom | Interest Only Mortgages

As life expectancy rises, an increasing number of retirees in the UK find themselves still paying off their mortgage. Around 40% of homeowners aged 65+ have outstanding mortgage debt. Many are what's known as 'cash poor but property rich' - with equity tied up in their homes.

This is particularly common with interest-only mortgages.

FCA data shows that there are currently 750,000 regulated interest-only mortgages outstanding, with 51,000 interest-only and 13,500 part-and-part mortgages due to mature in 2027. The peak years when the largest number of these mature are in 2031/2. A substantial number coming to maturity lack funds to pay off the capital balance.

There's no need for despair if you're in this position. There are options available to ease the burden and help you enjoy retirement.

One option is to re-mortgage to a more affordable mortgage.

Lenders are increasingly catering to older borrowers with products tailored for those in retirement. Rates may be higher than conventional mortgage, but extending the term could reduce your monthly payments.

Alternatively, you could consider downsizing to a smaller property and pay off the mortgage.

This solution has the benefit of lowering monthly outgoings associated with a larger home.

If you're reluctant to move but have built up substantial equity, an equity release plan could provide funds to settle the mortgage. It is essential to carefully weigh the pros and cons, as these schemes can impact your estate planning.

Seeking professional advice is recommended when exploring the options available. An advisor can assess your personal circumstances and outline the most suitable solutions for your needs and long-term goals. Making it possible to achieve mortgage freedom & enjoy your later years.

If you would like to discuss Equity Release in more detail then please contact Nicki Sparks at Dentons Mortgages on 07469 097179 or nicki.sparks@dentonsmortgages.co.uk

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.