Are you sitting on a mortgage time bomb?

Equity release offers a repayment opportunity for those with interest-only mortgages.

Endowment mortgages became popular around 30 years ago, they provided an interest only mortgage designed to be repaid with a savings product when the mortgage term expired. However, many saw them as a way of reducing their costs and made little or no effort to maintain the savings element and keep it on course to repay the outstanding mortgage.

*According to the FCA there are approximately 40,000 residential interest only mortgages due to mature each year between 2017 and 2032 where the consumer will be past 65 when the mortgage reaches the end of term. Many will be faced with paying a large sum of money to their mortgage lender that they simply may not have.

Whilst there are many who have little or no savings in place to enable them to repay their existing interest-only mortgages the value of those properties have increased. 

So what options are available?  

Well you could opt for a retirement-interest only mortgage (RIO), these are designed to help older borrowers who may struggle to get a standard residential mortgage. They allow you to borrow against your property and only pay back the interest (and not the loan itself) each month.

Another option is a lifetime mortgage, there is no affordability assessments to qualify for a lifetime mortgage. This means it can be a good option for older homeowners who may struggle to remortgage on pension income. With a lifetime mortgage, the amount you release, plus the interest owed, only has to be repaid after you pass away or move into long-term residential care. This is usually achieved through the sale of the home. 

Why consider equity release?

Given rising house prices over the years, equity release offers homeowners a way to benefit from this equity, without having to sell and downsize, and offers a repayment opportunity for those with interest-only mortgages.

**Thousands of UK homeowners are accessing their property wealth with a lifetime mortgage. With no required repayments and multiple customer safeguards, lifetime mortgages offer you a chance to benefit from the huge increase in property value over the last few decades.

If your interest only mortgage is reaching the end of its term and you would like to discuss your options please contact Harbour Equity Release on 0800 085 1786 or email us at enquiries@harbourequityrelease.co.uk.

If you are considering a lifetime mortgage, we have created our own equity release calculator, no personal details are required and you will receive your quote instantly www.harbourequityrelease.co.uk/calculator

*https://www.fca.org.uk/publication/research/fca-interest-only-mortgage-review.pdf

** https://www.equityreleasecouncil.com/news/q4-and-fy-2020-equity-release-market-statistic/

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