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Re-mortgaging a lifetime mortgage to a cheaper rate

  • Previous lifetime mortgage rate was 7%, arranged by a different firm
  • By recommending a remortgage with a lower rate, we were able to improve the amount of equity the clients had in their property

Clients’ circumstances

A man in his 70s and a woman in her 60s with a property worth £4 million.

Issues addressed

Their existing lifetime mortgage of £1.6 million had a relatively high interest rate of just above 7%, which meant that the amount owing was increasing rapidly. The couple were concerned about the loss of equity from their property.

The existing lifetime mortgage was only in the name of the husband, which restricted the choice of lenders. It was not possible to switch the mortgage into joint names because of a 13-year age gap and because there was insufficient equity in the property.

Tailored solution provided by John Lamb Hill Oldridge

We recommended a new lifetime mortgage with a lower interest rate. The new loan amount was £1.7 million, providing enough to pay off the previous mortgage and also to pay £60,000 in early repayment charges. The remaining funds were to be used for various home improvements and to provide the clients with liquidity for the future, in the absence of any other accessible funds.

Despite these early repayment charges and the increased borrowing, the reduction in interest rate meant the clients would have £23,000 more equity in their property after only three years than would have been the case had they remained on their previous deal. This benefit will only increase further over time with almost £600,000 in equity in the property after 10 years.

This shows that although the product is known as a lifetime mortgage, the option to remortgage may be available. If you want to find out more about remortgaging to a more favourable arrangement, please get in touch with John Lamb Hill Oldridge today.

Other Case Studies

Elderly client obtains a lifetime mortgage to pay for care costs

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A man aged in his 80s with a property worth £750,000 and a mortgage for £150,000 secured against it. The client had minimal income, but because of his care needs, he was spending £22,000 per year on his care (while remaining in the property) and on the costs of running the home. His savings were being rapidly depleted by these ongoing costs, even though his family were providing financial assistance. Another brokerage firm had already said that it could not assist him, and he was increasingly worried that he would be forced to leave his home.

Lifetime mortgage for consolidation of debts and home improvements

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A single woman in her 60s with a property valued at £400,000. The client had £25,000 in credit card and loan debt. It was costing her £600 per month to repay these debts, so this was having an impact on day-to-day living, even though her monthly income was £1,800. She also wanted to carry out some home improvements but had no savings and was unable to obtain further credit due to her impaired credit history.