Q My husband and I are stuck in a bit of a Catch-22. Since 2004 we’ve had an interest-only mortgage of £153,000. Our house is now worth about £303,000 so we have a large amount of equity. We want to swap to a repayment mortgage but we cannot find a mortgage we can afford because he is 62 (I am 51). The monthly repayments, based on the length of time he could pay a mortgage for, are just too high.
I earn enough to easily pay a repayment mortgage on my own, but no one will accept me as the sole mortgage-holder because my husband’s name is on our existing mortgage. This is despite me being the main earner and having an absolutely stellar credit history. Is there any way around this conundrum? JR
A The easy answer, when it comes to the maximum age you can be at the end of a mortgage term, is avoid most mainstream mortgage lenders which typically set the maximum at 70 or 75. Instead, investigate what’s on offer from the building societies which, in the Building Societies Association’s helpful consumer information guide “Can I get a mortgage at my age?’ says “are, in general, more flexible than high-street banks when it comes to maximum age limits. Some do not have a maximum age at all and many will deal with your application on an individual basis.”
Well the BSA would say that, wouldn’t they? But it seems to be true – especially at the fifteen or so building societies which have no age limits. Family Building Society offers repayment mortgages up to the age of 95, which means that you and your husband could easily be eligible for a 25-year mortgage. Loughborough has “borrowing into retirement” mortgages specifically designed for older borrowers in need of a mortgage term that will take them beyond the age of 80. At Ipswich – which offers mortgages on properties across England and Wales – there’s a special mortgage range for people aged 50 and over. Provided you have at least £150,000-worth of equity in your home – so only just in your case - and you don’t want to borrow more than 75% of its value on a repayment basis, there’s no maximum age restriction and you can get a loan with a term of up to 40 years.
The alternative to remortgaging is to make overpayments on your current mortgage. Provided you are not on a special deal, most lenders will let you overpay either on a regular basis or by making occasional one-off payments, although there may be a minimum amount that you can overpay if it’s not a monthly set-up.