Retirement Interest-Only Mortgages Offer Lifeline To Older Borrowers

A new breed of interest-only mortgage for older people is starting to take off. These deals could throw a lifeline to thousands of people who have an interest-only home loan that’s coming to an end, but don’t know how they are going to pay back what they owe. Interest-only mortgages became virtually extinct following the credit crunch. During the past few years some older homeowners with these mortgages have found themselves staring down the barrel of a big shortfall and worried they could lose their homes. The Financial Conduct Authority last year gave the green light to a new type of interest-only deal known as “retirement interest-only” mortgages and are a little more pricey than standard home loans. Read more on the Guardian website.

https://www.theguardian.com/money/2019/mar/23/retirement-interest-only-mortgages-offer-lifeline-to-older-borrowers

House Sales Surge Due To Interest-Only Worries

New research from equity release referral service, Key Partnerships, has revealed that many homeowners are being forced to sell their homes to pay off interest-only mortgages ahead of looming repayment deadlines. The report found that more than two out of five estate agents (43%) say the number of customers forced to sell to pay off interest-only mortgage debts has increased over the past two years. Mortgage debt issues are particularly affecting older customers trying to downsize to less expensive houses to release cash. Key’s research found 73% would-be downsizers are paying off mortgages. Estate agents are regularly asked for advice and guidance on mortgages and remortgages by clients – 58% say clients want support on mortgages. Read more on the property reporter website.

Mortgages: Nearly One Million 'Face Difficulties'

Nearly a million homeowners have no way of paying off their mortgages because they opted for interest-only loans, according to Citizens Advice. The new figure is much higher than previous estimates from lenders and from the City watchdog, the Financial Conduct Authority (FCA). Citizens Advice said 934,000 owners did not have a plan for how to pay back the money at the end of the mortgage term. It warned that time was running out for some to organise their finances. They faced having to sell their homes or even have the property repossessed if they were unable to find other funds, the charity said. Read more on the BBC website.