Deferring the Start of Rolled-Up Interest
Sometimes, two borrowers take out a plan together and make interest payments comfortably from their joint income.
But if one partner dies, the survivor’s income often falls - making payments harder to maintain. In this case, the surviving partner can choose to stop paying, allowing interest to roll up from that point onwards.
This flexibility can save a significant portion of the eventual property value compared to a plan where interest has rolled-up from day one.
In some families, adult children even help pay the interest - partly to support Mum or Dad, and partly because (let’s be honest) it also helps preserve their future inheritance. Everyone wins!
Can I Still Get a ‘Normal’ Interest-Only Mortgage?
It’s now more difficult to find a standard interest-only mortgage in later life.
Since new regulations were introduced, lenders must be satisfied that you can repay the full loan - and that’s where many applications hit a wall.
- Most lenders want mortgages fully repaid by age 75.
- The maximum borrowing is limited by retirement income, which is usually lower than during working life.
- You may have to remortgage again later, which isn’t ideal in retirement.
That’s why many people now look to lifetime mortgages as a more practical and secure alternative.
