I think anyone with an interest only mortgage without a repayment vehicle, will by now have a letter from their lender, warning them to make arrangements to repay their capital.

Nowadays, banks and building societies are reluctant to give mortgages to customers unless they pay capital as well as interest, but back in the day, interest only mortgages were as common as muck!

Borrowers whose endowment policies have gone by the wayside years ago, have been well warned to start making capital payments, but many interest only borrowers have simply done nothing.

The banks are starting to shape a solution to this problem in the form of a “Lifetime Mortgage.” In simple terms, older homeowners who cannot find a way of paying off their debt will be allowed to pay only the interest on their loans until they die, allowing them to stay in their home.

In return, borrowers would agree to give their house to their lender, rather than family, when they die. The bank would then sell the property and take the outstanding debt before passing the remaining proceeds to the estate.

Santander have announced that they will offer 'lifetime mortgages' from next year and other lenders are likely to follow suit.

Hopefully, once this batch of borrowers has been sorted, the next batch (the 40 something’s who all have to work well into their late 60s to get a pension) will all be fine, as they will have paid their loans back under the current rules. The 30 something’s however, won’t need to worry about having a mortgage when they retire, as they will presumably have to work until they fall dead at their desks anyway!

For more information or to speak directly to a mortgage advisor please contact us on 01628 507477.

Recent posts

With the stamp duty relief ending in England and Northern Ireland, we have listed the top 10 cheapest areas for first-time buyers as published by Rightmove. 

Are you looking to purchase your first home but unsure where to begin? Here are some tips to get you started.

Choosing which fixed rate to go for has been a dilemma for many of our clients so far this year. There really isn’t a right or wrong answer, but below we will look into the pros and cons of a two-year and five-year to help you make the right decision for you.

Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.

Call us for more information: 01628 507477 or email: team@mortgagerequired.com.

According to Rightmove, a whopping 500,000 UK homebuyers are rushing to finalise their home purchase before the new Stamp Duty rules change in April.

The UK government is introducing new rules for Energy Performance Certificates (EPCs) that will impact landlords. Here's a summary of the key changes

Choosing to buy a house is one of the biggest decisions you are likely to make in your lifetime. There are many factors that influence a house purchase, these include: finances, housing market conditions, and mortgage rates.

Since being launched back in 1999 Individual Saving Accounts (ISAs) have been very popular for those wanting to put money into savings. There are four types of ISA, and the majority allow flexible saving and the ability to withdraw funds easily. There are financial penalties on certain products, these usually pay the most interest.