As people reach retirement age, financial planning becomes a crucial aspect of ensuring a comfortable future. Many assume that options such as remortgaging are no longer available once they reach retirement, but this is not the case. 

At Thomas Oliver, we understand that remortgaging in later life is still a viable option for many, providing financial flexibility and peace of mind.

In this article, we explore the reasons why individuals consider remortgaging close to or in retirement, outline the application process, and explain how our team of experienced mortgage advisers can help you make informed decisions about your financial future.

Why Consider Remortgaging in Retirement?

There are several reasons why individuals may consider remortgaging in retirement. Some people find that their current mortgage deal no longer suits their financial situation or lifestyle, while others may want to release equity from their property. 

Below are some of the most common reasons for remortgaging at this stage of life:

Reducing Monthly Payments: As people approach retirement, they often want to reduce their monthly outgoings, especially if they expect their income to decrease. Switching to a mortgage with a lower interest rate or extending the term could reduce monthly payments and ease financial pressure.

Releasing Equity: Equity release is a popular option for those looking to unlock the value of their home without needing to sell. This can provide funds for various purposes, such as home improvements, clearing other debts, or helping family members financially.

Consolidating Debts: Some retirees opt to remortgage in order to consolidate multiple debts into a single mortgage payment. This can simplify financial management and potentially lower interest costs.

Home Improvements: As people spend more time at home during retirement, they may wish to make improvements to their property. Remortgaging can provide the necessary funds to make these upgrades, enhancing quality of life and potentially the value of the home.

Inheritance Planning: Some individuals remortgage as part of their estate planning strategy, using the equity released to help children or grandchildren with large expenses, such as university fees or property deposits.

The Application Process for Remortgaging

While remortgaging in later life is possible, the process can be more complex than for younger borrowers. Lenders typically have different criteria when assessing applications from older applicants.

Here’s an overview of the process:

Assessment of Affordability: Lenders will assess whether the applicant can afford the mortgage repayments based on their retirement income, which may include pensions, savings, and other investments. It's important to demonstrate that you have enough income to comfortably manage your mortgage payments.

Age Restrictions: Some lenders impose age limits on when a mortgage can be repaid. While there is no hard-and-fast rule, most lenders require that the mortgage is repaid before the borrower reaches a certain age – typically around 75 or 85 with some going even higher, though some may offer flexibility depending on individual circumstances.

Property Valuation: Just as with any remortgage, the lender will need to conduct a valuation of the property to determine how much equity is available. This will influence how much you can borrow.

Product Choice: Lenders offer a variety of mortgage products specifically designed for older borrowers, including lifetime mortgages and retirement interest-only (RIO) mortgages. These products come with different features, interest rates, and terms, so it’s important to choose the one that aligns best with your financial goals.

Understanding All Your Options

The remortgaging landscape for those approaching or in retirement can be complex, with many different products to choose from. Our role at Thomas Oliver is to explain the differences between standard remortgages, retirement interest-only mortgages, and equity release options such as lifetime mortgages. We take the time to understand your financial situation and future plans, ensuring that the advice we provide is tailored to your needs.

Gulay Dugunyurdu, Mortgage Broker & Protection Adviser in Enfield, East & North London said: 

“Navigating the world of remortgaging, especially in retirement, can be daunting. This is where working with one of our mortgage advisers can make all the difference. Our team is here to guide you through the entire process, ensuring you understand all available options and helping you make the most appropriate choice for your unique circumstances.”

Practical Help with the Application Process

In addition to providing advice, we also offer practical assistance with the remortgage application process. This includes:

Sourcing the Most Relevant Deals: With access to a wide range of lenders, we can identify mortgage products that meet your specific needs and help you secure the most competitive interest rates available for those needs.

Paperwork Assistance: Mortgage applications can be time-consuming and require a great deal of documentation. Our advisers can manage much of this on your behalf, liaising with the lender, submitting paperwork, and ensuring all documentation is in order to avoid delays.

Liaison with Lenders: Should any issues arise during the application process, we act as an intermediary, communicating with the lender to resolve any problems quickly and efficiently.

Making an Informed Decision

At Thomas Oliver, our goal is to empower you to make informed decisions about your financial future. We pride ourselves on providing transparent advice, so you can feel confident that the mortgage product you choose is the right fit for your needs.

We understand that every individual’s financial situation is unique. Whether you’re looking to reduce your monthly payments, release equity, or simply find a mortgage that better suits your retirement income, we are here to provide the support and guidance you need.

Understanding the risks

Remortgaging in retirement can offer benefits as mentioned above, however it can come with some risks. Affordability can be an issue if your retirement income decreases, and higher interest rates on specialised products can increase costs. Equity release may reduce the inheritance you leave, and some plans may also involve giving up a portion of your property’s future value. Additionally, early repayment charges can limit flexibility, and lenders may restrict borrowing based on age or income. It’s essential to fully understand these risks and seek advice from a qualified mortgage adviser before proceeding.

In Summary

Remortgaging in retirement is not only possible but can be a strategic way to manage your finances and make the most of your assets. While the process may come with its challenges, working with an experienced mortgage broker like Thomas Oliver can make all the difference. Our team of dedicated advisers will help you navigate the options, find the right mortgage product for your needs, and handle the practical aspects of the application process.

If you’re considering remortgaging as you approach or enter retirement, contact us today. We’ll guide you through every step of the way, ensuring you have all the information you need to make the best decision for your future.

A lifetime mortgage is not suitable for everyone and may affect your entitlement to means tested benefits, so it is important to seek financial advice before taking any action. If you are considering releasing equity from your home, you should consider all options available before equity release.

The interest that may be accrued over the long term with a Lifetime Mortgage, may mean it is not the cheapest solution. As interest is charged on both the original loan and the interest that has been added, the amount you owe will increase over time, reducing the equity left in your home and the value of any inheritance, potentially to nothing.

Although the final decision is yours, you are encouraged to discuss your plans with your family and beneficiaries, as a Lifetime Mortgage could have an impact on any potential inheritance. We would also encourage you to invite them to join any meetings with your Financial Adviser so they can ask questions and join in the decision, as we believe it is better to discuss your decision with them before you go ahead.

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Thomas Oliver UK LLP is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.

Approved by The Openwork Partnership on 23/01/2025.