As you approach or enter retirement, it can be troubling to find yourself tied to an outstanding mortgage. It’s likely your regular income could drop, meaning you may find it more difficult to keep up with payments; potentially leaving you in a troubling position.
Usually, retirement is billed as a time to unwind. The stresses of everyday life are left behind and, it’s thought, you can enjoy life more.
However, with financial concerns, it can feel impossible to have peace of mind. And the importance of the situation is not lost on most.
How to tackle your interest-only mortgage
If that’s you, one day you could be presented with the situation you may have been dreading – the end of your agreement. It’s time to pay the balance, but you can’t.
There aren’t many situations which will cause as much stress or worry throughout your life. Making a property your home takes time, effort and money, and to have the very real proposition of all that being taken away from you is harrowing.
Nonetheless, it’s something you can’t ignore. Of course, you can try to renegotiate a deal with your provider, although for many, that’s not an option.
You could find yourself in this situation for many reasons. Life isn’t always as simple as we’d like it to be. But you’re not by any means the only homeowner going through something like this. An average of more than 80,000 households
a year have faced the end of their interest-only mortgage deals since 2018.
And it’s not only those with an interest-only mortgage who may be concerned either. Retiring with any type of outstanding mortgage can cause a lot of stress. Is your new income flexible enough to cover repayments as well as everything else you need in life? If not, there are options available to you.
could be one of them.
“Our mortgage provider was aware of our situation but unfortunately could not help us. Instead, they suggested a few options to look into to improve our situation. One of which was equity release to pay off the outstanding mortgage so our savings remained untouched.
“After looking online, Key appeared to be the most respected and reputable equity release company. We did our research and agreed that this would be the best option for our needs.
“We contacted Key who organised for an independent adviser to visit us and discuss our options. He was very helpful. There was no pressure to proceed.
“When we did decide to go ahead, the process was very smooth and we felt relieved to have finally paid off our existing mortgage. It had felt like something was hanging over us. Now we can just enjoy our retirement without worrying.”
Things to consider
Our specialist equity release advisers search our entire product range to find the right equity release plan for you. They’ll explain:
- You have to get advice before releasing equity - please read all our information and make sure it's right for you
- The plans we recommend have a no negative equity guarantee, so you’ll never owe more than your home’s value
- Equity release reduces your estate's value and may affect any means-tested benefits you're eligible for
- A lifetime mortgage, which is a loan secured against your home, is the most popular form of equity release and you will still own your home
- You should always think carefully before securing a loan against your home