Mr & Mrs Edwards are aged 78 & 63 and are coming to the end of their interest only mortgage term. They want to borrow £80,000 on their property, to enable them to clear their existing mortgage and clear some unsecured borrowing. The property is currently valued at £240,000 and they want a mortgage term of 30 years.
They have chosen downsizing as their preferred repayment strategy because they want to remain in their existing home for as long as they are able to. Staying close to family is important to them.
Both are retired. Mr Edwards receives a full state pension and Mrs Edwards is due to receive a full state pension at 65.
Additionally, Mr & Mrs Edwards are in receipt of private defined benefit pensions for £25,700 & £15,000 which both have spouse’s benefit of 50%.
The 55+ mortgage could be offered for the loan amount requested providing them with the flexibility to continue interest only mortgage payments and to remain in their current property and be near their family.
Why does this case work?
Ages qualify because the youngest borrower is 63 so a term of 30 years takes them to 93 which is within the 55+ Mortgage criteria age range (based on the youngest borrower).
Downsizing is an acceptable strategy because there is more than £150,000 equity left in the property after the loan has been taken out.
Affordability works because both Mr & Mrs Edwards have a good amount of pension income from both state pension and defined benefit pensions with a 50% spouse’s benefit meaning one could afford repayments in the event of their spouse’s demise.