We paid our mortgage off a few years ago, both 50, house worth 700K we would like to borrow 210k interest only to spend on what we like.
Funnily enough I know the commercial and BTL market and rules backwards but know nothing about personal stuff.
Is it possible?

Regardless of whether you get one, why would you want a 200k interest only loan? sounds a bit risky!

I’d guess you’d have to risk your current property as collateral.

Yes. Most lenders don’t like to go beyond normal retirement date. How long are you wanting to borrow for and how do you intend to pay it off at the end of the term? Usual affordability checks would be done to ensure you can afford the payments.

No problem with affordability.
Will pay it off by selling the house and downsizing when the kids have gone.
Just want to spend the dosh now and have a good time.

I think my issue is that its not a “remortgage” as we don’t have another mortgage to pay off, its like a new mortgage… Just wondered if this was a problem.

You can do it – its called equity release and its a minefield.

The rates are generally awful and there are more scammers in the game than on craigslist

good luck!

Sounds like an equity release mortgage.

I only know about this because I watched the TDF on ITV4!

50 is too young for most equity release schemes. But you should be able to get a mortgage, best just to talk to a broker.

Do a search for unencumbered mortgage.

210k interest only to spend on what we like.

have to say I am loving this, enjoy

When do you think the kids will leave. 52 here, son and daughter 21/19. Colleague at work is 35 and just looking to buy first house (living at home stil). I’ll be drawing even my state pension and employers pensions by that time line. FFS. Pension paid off now though.

Sounds like a plan though – MIL’s house has had to have a council Charge against it to pay for care fees, so not much left for inheritance. A reason not to have lots of assets in old age.

You could borrow more than the 200k to have enough in the bank for 200k plus repayments (say 240k) then just pay it back from the buffer?

Company will want to know what it’s for. Mine wouldn’t loan so I could invest it, for example, but would loan if they thought it was for renervations etc. I would just find a way to spend it that they’re happy with

Normal mortgages have way better interest rates than equity release. Avoid the latter

I dunno, I guess when the mortgage runs out I’ll sling em out. Youngest is 13, so with me at 50 she has 15 years I reckon.

I’m in Canada so it may be different over here but I’ve paid off my mortgage (yay!) yet I have a “line of credit” secured against the house for similar “fun” purposes.
I can pay off any capital (plus interest) if I want to, or just pay off the interest only (and capital is re-paid when we sell house).

No idea how “efficient” this is but it’s available if needed (not used it yet apart as a brief workaround when I needed to shuffle some money to my pension and just repaid all capital immediately).

Sounds like a plan though – MIL’s house has had to have a council Charge against it to pay for care fees, so not much left for inheritance. A reason not to have lots of assets in old age.

Kinda this, kids are smart and will do well. We want to enjoy oursleves…

Update – we got a mortgage with Skipton, which was kinda OK until we got to their in house conveyancers, they use a far east call centre to handle all the set up and document gathering, which was really painful and time consuming. However when that phase was over it was handed over to a UK person, the actual conveyancer, who was brilliant.

So what are you spending it on then?!

So what are you spending it on then?!

Fairy lights?

So you got an intrest only mortgage? I thought they’d gone

Fairy lights?

Top work there

Presumably you don’t need it all in one go, so why not just spend it and finance from the monies you’d be paying in interest?

And presumably you’ve already spare cash every month, as you’re not paying a mortgage currently.

Taking it all in one go will cost you more in unnecessary interest, better to take for example £50k every year for 4 years.

I don’t see why it wouldn’t be possible. Somebody will want your custom. I’d speak to a broker first.

I’m in a similar situation at the moment, but the figures are a lot lower.
We want to build a new house. We’ve bought the plot, foundations are finished, we have no money left, so want to borrow £100k to finish it.
My current house is worth around 230k. I owe £20k on it. So roughly 200k equity in the house. I thought it would be easy to get a loan for that, as, clearly, the risk is very low. However, banks see it rather differently. I just cannot get a loan. Tried various banks/BS’s and 2 Brokers, none of them can help. It is affordability. I’m 58, and they say I cannot afford a loan of £100k over 10 years (it wont be 10yrs, it’ll be a maximum of a year, then we’ll sell my house and pay it off). The most they’ll give me is £44k, which doesnt help at all. Short term loans hold no interest for them, as they have to still account for paying it off each month, which would be impossible for such a loan. I’ve been told there are some private investors who will lend against the house, but they are specialist, and will charge a very high APR, and there are lots of hoops to get such a loan, and even finding someone to do it is difficult.
I think you will be in the same situation unless your income is enough to be able to pay off the loan. Oh, another thing, all of them said they wont be doing interest only loans/mortgages, and another we tried, a bridging loan, but that had.a life limit (18 months iirc) and an APR around double the mortgage rate, as well as only allowing around 30% of the value of the property.

Can’t you spend 40k getting new build to a stage where you can get a mortgage on it to finish it. Then sell original house and pay off the 40k secured on it and say 60k secured on new build?

.

AlanL sound similar to us,  we had a huge rigmarole with this, in fact this is our fourth application, the first three fell over at various hurdles. There was granular work on proving income and detailed examiantion of tax returns etc and then they would only lend max 40% of the value of the property. Fine for us as we only wanted 210/750 but even so it seemed ridiculous. We are used to the hassle in the BTL market but this was actually stricter.
So with your 230 value, 44k seems a bit mean. Worth looking at skipton. They ended up being the least faff and the most generous, and no issue with interest only. And we told them it was for investment as we wanted that as an option.

Spending – the jury is out, I want to buy an aeroplane, and take some time out touring Europe and Africa but we may invest it in a holiday home or another rental property. Having discussions with the boss at the moment. Obviously my ideas are quite low down her list of things that will be approved. Plus I need to learn to fly first, but we may fix that with a spell in the US where it is cheaper…
Hmmmmmm. Options..

Alanl, can’t you just sell now and rent?

Alanl, can’t you just sell now and rent?

Yes, that is what we are doing. It has delayed our new house by 6 months, but is the only practical option to get it done. If we could get a loan, we could get the structure of the house up,while living here, then camp out in the new one while I finish it off, but now we will have to rent for 6-12 months.
It’s difficult doing the self build mortgage route, as its a timber framed house, 30k down, 30k a month before delivery, and 30k on delivery, so we really need all the cash to be in place before ordering.

Good luck from now on in Alan.

Alanl, have you tried Ecology for a mortgage? My my research they seem to be one of the easier to deal with options in terms of listening to want you want rather than computer says no.

Yes you can do it. I remortgaged a house I’d paid off in full for 65% of it’s value. It’s going to pay for my extension on this place.

I told the mortgage company I wanted to spend it.

Unencumbered mortgage. Job jobed.

FWIW a few years we were converting one of our barns into a Granny Annex for my Mum, we couldn’t get a mortgage to cover less than a years earnings (as Contractors), but when my OH took a perm job she could get 4* earnings (on far less than as a contractor). Note as it was a part of our property, the mortgage was less than 25% of the overall value.

In the OP’s position I still wouldn’t be extending the mortgage though.