25 years ago I was sat in my office selling endowment mortgages. Lots of them! Please don't hold it against me, at the time they were all the rage.
Both Interest rates and returns on investments were high and it made perfect sense for borrowers to pay just the interest on their mortgages and save in an endowment policy to repay the mortgage in 25 years’ time. But then interest rates got higher, things got tighter, interest rates went higher still, things got even tighter.
Fast forward to today and it is estimated that over ½ million interest only mortgage holders have absolutely no plan in place whatsoever to repay their mortgages when they are called in for repayment over the next few years.
At the beginning of last year the Mortgage Required phone started to ring with a trickle of slightly panicked individuals wanting advice on what to do about the £50,000/ £ 150,000 / £250,000 the Halifax / Cheltenham & Gloucester/ Bank of whoever needed back in 6/3/1 months’ time! Now we are getting a steady flow of such calls. The bad news is, the lenders do want their money back, and the great news is that there are now plenty of options:
If you are still working, there are plenty of lenders happy to extend terms on a normal affordability based mortgage. At the other end of the scale, there are plenty of lenders offering “Later Life” Lending (the cleaned up version of Equity Release) where they will simply give you the money and you pay nothing at all and the interest simply accumulates. These schemes allow you to stay in your home until you die and come with no negative equity guarantees.
But there is an ocean of borrowers who sit in the middle. Those who have decent pensions or reasonable incomes who can still afford to pay their mortgages each month, but simply don't have the capital to repay the loan. Lenders such as Santander and Hodge Life have come up with some hybrid products to suit all needs and pockets.
So, if you have a mortgage which is due for repayment any time soon (and by that I mean in the next 5 years!!!) and you haven't yet got a plan for repayment, contact an independent mortgage adviser who deals with later life lending. The sooner you make the call, the chances are the more options that will be open to you. Oh, and by the way, don't panic!
For more information about later life lending contact us on 01628 507477.
Related articles:
Recent posts
There has been a rise in both rent and mortgage costs over the last three years, with renters seeing a greater increase in their monthly payments than those with a mortgaged property.
Delayed Start Mortgages
7 days ago
The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers.
Green Mortgages | Rewards and Benefits
9 days ago
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
When will mortgage rates fall further?
19 days ago
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
Lloyds boost lending for first-time buyers
26 days ago
Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.
As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more.
The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.
Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.
More information
Trusted by
