Borrow MORE with your pension

Sep 20, 2023

As mortgage brokers the most common issue we overcome for our clients is affordability. Believe it or not, there’s over 900 registered lenders in the UK. Of course, not all are actively lending to new customers, here at Advantage FS we’re proud to have used 87 different first charge mortgage lenders (data to September 2023)  when finding our clients the most suitable mortgage product. 

As you can imagine, the amount of money that each lender is prepared to lend varies massively. A common denominator is often the dreaded ‘income multiple’. This essentially means that whilst the lender using a calculator determines how much they can lend to you, there is an ultimate line in the sand at a certain multiple of the income used. Quite often this is 5 times your income. 

This is not necessarily the case if your income is from one or more pensions. Some mortgage lenders that offer retirement mortgages (Including Retirement Interest Only) will determine how much they can lend to you based on how much disposable income you have left over each month after your essential expenditure, this often means that the amount you can borrow is over 5 times your income. In some cases, over 10 times! 

 
Here’s a few examples of customers we have helped in 2023:

 

Example 1

A Married couple, aged 69 and 73. Combined pension income of £58,000 with no financial dependents and no unsecured debts.  We were able to obtain a mortgage of £500,000 for this couple which allowed them to help out their son and extend their home. 

 

Example 2

Widow, aged 65. Her husband died in 2018 without life insurance, the mortgage was affordable one the current fixed rate but the payments were going to more than double in a few months when the fixed rate deal comes to an end. She would not be able to afford the new mortgage payment. Her pension income was £21,000 in total and she needed to borrow £118,000. She had spoken to several brokers and had just about given up hope of being able to re-mortgage at a lower rate and was resigned to sell the property she had lived in for over 30 years. We were able to secure her a mortgage for £108,000 on an interest only basis with a payment similar to the payment she was making at the time. She had the money in savings to reduce the overall mortgage debt to £108,000 and was over the moon that we were able to arrange a mortgage which enabled her to keep the house. 

 
If you’re over 50, whether you’re coming to the end of a mortgage, purchasing a new home or interested in releasing capital for any purpose. We’re here to help, get in touch today for a free mortgage direction call. 

Still have questions? Get in touch to see how we can help you.

Your home could be repossessed if you fail to make your mortgage payments. 

Steven Morris – Advising Director

CeMAP CeRER

 

Steve loves a complex mortgage. Most recently he has used his technical geekery to work his way up through Which? Mortgage Advisers, progressing to Senior Adviser and then Onboarding Manager. There, he was responsible for hiring, training and managing new advisers.

He also ran the monthly new starter inductions and wrote and maintained the telephony advice standards of the company. Outside of work Steve can be found coaching and being run ragged by his local under 10’s rugby team, Bristol Harlequins RFC.

Meet the rest of the Advantage Team

Why a Local Mortgage Advisor Makes All the Difference for Your Bristol Home Journey

Congratulations! You've decided to take the exciting (and sometimes daunting) step of buying a home in Bristol or the surrounding area. Whether you're a first-time buyer eager to step onto the property ladder or a seasoned mover looking for your next dream home,...

Are mortgage rates in the UK going up or coming down 2024

I thought mortgage rates were coming down in 2024, what is happening?  Let’s get a misconception out of the way early about how mortgage rates have been changing… Mortgage rates available during January 2024 were cheaper than anything else we have seen since. For...

Homeownership Made (Slightly) Easier: The New £5k Deposit Mortgage

Surprise news for first-time buyers!  Accord Mortgages and Yorkshire Building Society have launched a brand new mortgage product that lets you step onto the property ladder with a deposit of just £5,000. That's right, you can finally ditch the housemate and snag your...

UK Mortgage Rollercoaster: Rates Tumble, Yet House Prices Remain a Challenge (April 6, 2024)

MARKET WATCH! UK Mortgage Rollercoaster: Rates Tumble, Yet House Prices Remain a Challenge (April 6, 2024) This week in UK mortgages has been a tale of two trends: good news for potential borrowers with falling rates, and lingering concerns for some facing a tough...

UK Mortgage Rates: A Quick Look at the Last Week (as of March 24th, 2024)

MARKET WATCH!  UK Mortgage Rates: A Quick Look at the Last Week (as of March 24th, 2024) This week in the UK mortgage market (as of March 24, 2024), we've seen a relative pause after several weeks of steady increases in interest rates. The Bank of England (BoE)...

Help! I’m a Birmingham Midshires Residential Mortgage Customer

Birmingham Midshires Exited Direct Mortgage Market in 2011: What Existing Customers Need to Know  Important information for Birmingham Midshires mortgage holders: As of October 1, 2011, Birmingham Midshires made a significant change – they stopped offering...

February 26th 2024 mortgage news

Halifax buck the trend In a surprising move, Halifax, the UK's biggest mortgage lender, has cut its mortgage rates, going against the recent trend of lenders raising theirs. This move is seen as an attempt by Halifax to gain market share in the competitive mortgage...

February 14th 2024 mortgage news

What's in the news? February 2024   The cost of moving and stamp duty is putting millions of homeowners off of potentially downsizing. Older homeowners are unable to move to smaller properties because of the financial burden that comes with a house move, and this...

Navigating the Financial Maze of Downsizing in Retirement: What are Bridging Loans?

Retirement often marks a period of transition, a time to embrace new experiences and simplify life. Many retirees consider downsizing their homes, seeking a smaller, more manageable living space that aligns with their changing needs and lifestyle. However, the...

Mortgage rates are falling in the UK as lenders battle for business in 2024

After a gruelling two years of rising interest rates, the UK mortgage market is now seeing a price war as lenders compete for business. This is good news for borrowers, who are now finally seeing rates fall. Halifax, one of the country's biggest mortgage lenders, has...

Celebrating more 5-star reviews than any other independent broker in Bristol!

Contact us today to find out why we've received over 400 hundred 5-star Google reviews

You have Successfully Subscribed!