Paying An Interest-Only Mortgage With A High LTV Lifetime Mortgage

The client

Evelyn C. Francis*

• Single

• Aged 80

• Current house value: £270,000

• Requires: £120,000

• Maximum loan-to-value: 50.5%

• Drawdown facility 

Evelyn’s story

Evelyn’s endowment doesn’t stretch far enough to cover the remaining balance of her interest-only mortgage. Her outstanding mortgage is £40,000; however, she’s also looking to raise funds to take the family on a cruise.

As Evelyn is 80, she wants to make previsions for domiciliary care in her home for which additional funds are needed. She’s comfortably lived in her current home for several years and with time the value of the property has increased. Evelyn turns to her later life mortgage adviser for support, who reviews and discusses later life borrowing options with her that best match her current and future financial needs

Optional Repayment Possibilities:

As Evelyn has some premium bonds, if she were to get a windfall, she’d be interested in making some one-off contributions towards the loan. These voluntary payments will help her minimise the risk of the equity eroding and will enable her to leave more equity in the home for her family after she passes. She can make up to 6 payments per year ERC-free provided these are no more than 10% of advances.

Managing Her Lifetime Mortgage with MyPure

Evelyn can manage her lifetime mortgage online through the account management platform, MyPure. She can view her account balance, make one-off optional repayments, and access a bank of FAQs to support her along the lifetime mortgage journey.

Evelyn is advised to take a Heritage Special lifetime mortgage from Pure Retirement

• Maximum available is £136,350 and she opts to release 44.4% LTV (£120,000)

• She uses £60,000 to pay-off her mortgage and treats the family to a cruise

• She opts for a drawdown facility and uses the remaining £60,000 for home care

*Client names have been changed to provide anonymity. We cannot give any assurances that applications outside our lending criteria will be approved.