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How can I pay off my existing mortgage in retirement?

Category:
Your Money
Thursday 28 January 2021
By paying off your existing mortgage before retirement, you could free up money to spend on the things that you need and want.

But what happens if you haven’t paid it off by the time you’re done with working life? Is it still possible to pay off your mortgage in retirement and feel more financially secure?
 

Releasing equity

Entering retirement with an outstanding mortgage can be worrying. As it’s usually one of our biggest outgoings, maintaining monthly mortgage payments without it affecting your quality of life can prove difficult. Particularly at a time when incomes traditionally fall.

There are options to help you pay off your outstanding mortgage, though, even when you’re in retirement. One of these is to unlock some of the tax-free cash from your home with a lifetime mortgage.

Find out how much you could unlock here
 

We all have questions…

Whether it’s because your interest only deal has reached maturity, your promotional interest rate has come to an end or you simply want to have more financial security without the burden of monthly repayments, releasing some of the equity from your home could help you pay off your existing mortgage. Leaving you secure in the knowledge you still own your own home.
 
When it comes to releasing equity, we all have questions - so let us give you the answers to some of the ones we’re most frequently asked.

How could releasing equity pay off my existing mortgage?
If you’re aged over 55, own your own home and it’s worth over £70,000, you may be able to release a tax-free sum from it with a lifetime mortgage. You could access anything from £10,000 to 56.8% of the value of your home to clear your existing mortgage.

Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits. You should always think carefully before securing a loan against your property.

What sort of lifetime mortgage products are available?
With annual rates starting as low as 2.37% fixed for life, interest and capital repayment options, inheritance protection for your loved ones and the choice between lump sum and draw down facilities, Key’s range of over 80 different plans offer a flexible solution that can be tailored to meet your financial needs.

Will my home still be my own?
Yes, with our plans you’ll still own your home and you can live in it for as long as you choose, without ever having to worry about paying the mortgage or finding the best deal again. Plan terms and conditions apply.

What about monthly repayments?
Key Equity Release offer lifetime mortgages only, which is a loan secured against your home. With a lifetime mortgage there are typically no monthly repayments to make, as the loan plus roll-up interest, is repaid when the plan comes to an end. Usually this is when you, or the last remaining applicant, either passes away or moves into long term care.

All of Key's equity release advice relates to their range of Key branded products and is completely free-of-charge, so you can find out if it’s right for you without it costing you a penny. And if releasing equity isn’t right for you, we’ll tell you

This frees up more of your income to spend how you choose and could provide greater financial peace of mind. However, if you want to manage the size of the loan some of Key’s plans enable you to make ad hoc repayments towards the initial amount you borrowed when you can afford it. 
 

Want to find out more?

You can find all the answers, as well as hear from those who have already released equity from their homes with our free guide. Download it here and we’ll post you out a copy free of charge too.
 
Download your free guide
 
Page last updated: Monday 01 February 2021