We advise homeowners in Sheffield and across South Yorkshire by phone and video call. If you own your home in the city and you are over 55, this page is about what it could do for you, and in particular what to do if an interest only mortgage is coming to an end.
When an interest only mortgage is nearly finished
This is one of the most common reasons people in Sheffield get in touch. The mortgage was taken out years ago on an interest only basis, the end date is getting closer, and there is no lump sum set aside to pay it off.
It is worth starting early. Your options are widest while there is still time on the clock, and lenders look at your age, your property and your income in different ways. Leaving it until the final months narrows the choice.
There are usually three routes to look at:
- A lifetime mortgage can repay the existing mortgage, with no monthly payments required. Any existing mortgage is repaid out of the release, so what reaches you is whatever remains after that.
- A retirement interest only (RIO) mortgage keeps the same shape as the mortgage you have now: you pay the interest each month and the loan is repaid when the property is sold. It is affordability assessed, so your income needs to support the monthly payment.
- Selling and moving somewhere smaller is sometimes the right answer, and Craig will say so when it is.
Which one suits depends on your age, your income and what you want to happen to the house. That is exactly the conversation we have.
Hillside homes and stone terraces
Sheffield is built across a run of hills and valleys, and its housing reflects that.
Victorian and Edwardian stone and brick terraces, through areas such as Walkley, Crookes, Hillsborough and Nether Edge, are ordinary residential property and generally straightforward for lenders.
Larger detached and semi-detached homes in the south west of the city, around Ecclesall, Fulwood, Dore and Totley, often carry a good deal of value, which widens the options.
Ex-local authority housing is common across the city and is not a bar in itself, though individual lenders have their own criteria.
Non-standard construction is not an automatic no. Non-standard properties are referred to a lender for a decision rather than declined out of hand, and lenders take different views, which is where being whole of market earns its keep.
Not everyone should do this
Equity release is not always the right answer, and Craig will tell you when it is not.
Sometimes a retirement interest only mortgage costs less over time, if your income supports the monthly payment. Sometimes there is a benefit going unclaimed. Sometimes the right answer is to do nothing at all.
That conversation costs you nothing either way.
What we can look at
- Lifetime mortgages, whole of market
- Retirement interest only (RIO) and term interest only (TIO) mortgages, independent whole of market advice
- Interest only mortgages for ages 50 and over, independent whole of market advice
- Home reversion, referred to sector specialists
The basics
- 55 or over for a lifetime mortgage, 50 or over for a RIO
- Property worth at least £70,000, minimum release £10,000
- No upper age limit
- Joint applications assessed on the younger applicant
- Any existing mortgage repaid out of the release
Roughly up to 28% of your property's value at 55, around 37% at 65, around 44% at 70, and up to 60% from 80 onwards.
Not sure how any of this applies to your own circumstances? Craig is happy to talk it through, free and with no obligation.
Talking to us
By phone or video call, whichever suits. The first conversation is free, and our advice fee is a maximum of £1,495, payable only if your case completes.
Book a call with Craig or call 0113 403 5584.
