Published on: 9 May 2025
Our Lending into Retirement range is designed for your clients who are still working but want to take a mortgage into retirement. Here's how we were able to support Grace and Tom with a Lending into Retirement solution.
Tom is 65 and Grace is 63. Tom is retired but currently has no income. The couple’s only income is from Grace who’s still working. She earns £40,000 p.a. and plans to retire at 70. They’ll both draw full state pensions at 66. In addition, Grace has an occupational pension which will provide £10,000 p.a. when she retires.
They have a joint mortgage of £150,000 on a property in the South West, valued at £300,000. They’d like to borrow £150,000 and would like downsizing to be their repayment method. However, due to our minimum equity requirement, which is based on region, we need £200,000 in equity to accept downsizing as a suitable repayment vehicle.
To work with the minimum equity requirement, we were able to offer Grace and Tom £100,000 on interest only and £50,000 on repayment. We proposed a 15-year term which takes Tom to age 80. By stretching the term, the mortgage payments were more affordable allowing them to repay £50,000 of their current borrowing, whilst improving their future equity, ready for them to downsize.
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