Name: Mr & Mrs Lewis
Age: 69 & 72
Mortgage: 55 + Mortgage
Term: 20 Years

The Lewis’s – gifting to family

Mr & Mrs Lewis are aged 69 & 72 and have no mortgage currently on their existing residential property. Their children have left home but they want to raise £195,000 as a gift for one of their children and help them purchase a residential property. The property is currently valued at £350,000 and they want a mortgage term of 20 years.

They have chosen downsizing as their preferred repayment strategy, with them planning to move into a smaller property in the same area at the end of the mortgage term.
Both Mr & Mrs Lewis are still working stating they plan to do so until the age of 80. They are earning a combined employed income of £19,000.

The applicants are both drawing state pensions and also in receipt of private defined benefit pensions of £11,000 & £13,000 respectively, which both have 50% spouse’s benefit. Additionally Mr & Mrs Lewis have combined cash savings of just over £200,000.

The 55+ mortgage could be offered for the loan amount requested, providing flexibility to release equity to assist a family member, as well as enabling them to retain savings they have accrued for their retirement.

Why does this case work?

Ages qualify because youngest borrower is 69 and a term of 20 years takes them to 89 which is within the 55+ mortgage criteria age range (based on the youngest borrower).

Downsizing is an acceptable strategy because there is over £150,000 equity left in the property after the loan has been taken out.

Affordability works because both Mr & Mrs Smith have a good amount of income having both employment and retirement income, the defined pensions have a 50% spouses benefit on each meaning they could continue repayments in the event of their spouses demise.

As they both undertake part time administrative office based duties in their business roles we would consider it acceptable for them to work until age 80 and therefore can take this income fully into account when assessing affordability.


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