John and Margaret Smith - Redeeming interest only mortgage

Here is how the Smith's redeemed their large interest only mortgage. They made the wise decision to speak with a qualified , whole of market equity release adviser.


3/21/20242 min read

John and Margaret Smith, both aged 77, found themselves in a sticky situation. Their dream vacation, a luxurious cruise across the Mediterranean, seemed to be slipping away. While they owned a valuable property worth £3,000,000, a hefty interest-only mortgage of £900,000 loomed large.

The problem? Their current lender was refusing to extend the mortgage term, and due to their pension income, they couldn't find another lender willing to take them on. Disheartened but determined, John and Margaret sought professional advice and contacted Richard, a whole-of-market equity release advisor.

Richard took a deep dive into their situation:

  • Financial Snapshot: The valuable property and the large existing mortgage were key factors.

  • Retirement Income: Their pension income, while not substantial, provided financial stability.

  • Goals and Aspirations: The dream cruise remained a top priority.

Exploring Options:

Richard meticulously explored all available options. Downsizing was considered, but John and Margaret were deeply attached to their home filled with cherished memories. Traditional remortgaging wasn't an option due to their age and income.

A Solution Emerges:

After careful analysis, Richard recommended a Lifetime Mortgage. This product allowed them to:

  • Repay Existing Mortgage: The Lifetime Mortgage provided a lump sum that paid off their existing £900,000 mortgage in full.

  • Reduced Monthly Outgoings: Since Lifetime Mortgages don't require mandatory monthly repayments, their cash flow improved significantly.

  • Dream Cruise Ahoy!: With the burden of the old mortgage lifted, John and Margaret could now comfortably save for their dream cruise.

  • Flexibility for the Future: A key advantage of their chosen Lifetime Mortgage was the ability to make voluntary repayments whenever they wanted. This meant they could use future savings to reduce the overall loan amount and minimize interest accrual.

The Outcome:

John and Margaret were thrilled! Their dream cruise was back on track. The Lifetime Mortgage not only provided the financial freedom for their vacation but also offered a long-term solution for managing their finances. They were excited about the flexibility to make repayments in the future, ensuring they left a healthy inheritance for their loved ones.

Key Takeaways:

  • Equity release, when explored with a qualified whole of market advisor, can be a viable solution for the over 55's facing financial challenges.

  • It can unlock the value tied up in their homes and improve their financial well-being.

  • Lifetime mortgages offer flexibility and can be tailored to individual needs and goals.