Case Studies

Case Study: Remortgaging into retirement

Mr and Mrs Smith are coming to the end of the term of their existing interest-only mortgage, and have a shortfall of £60,000 remaining.

Their children have left home but trading down is not a viable option as their home is conveniently located for their work, and the spare room is used for their grandchildren to stay.

Their existing provider will not extend their term, and the re-mortgage options in the residential mortgage market are limited.

Both Mr and Mrs Smith have some reservations with traditional roll-up equity release - they are not comfortable with an increasing debt but are happy to continue using their income to service the loan. They would also like to repay the loan in full over time but are worried about having a 'cliff edge' repayment date. They do not wish to find themselves in the same situation again in 15 or 20 years.

The Retirement Mortgage would offer Mr and Mrs Smith the comfort of knowing that the capital could ultimately be paid off on death or going in to long term care. It would also give the flexibility to manage the debt by requiring interest payments on a monthly basis and allowing them to make overpayments using the Flexible Repayment Option to reduce the capital balance.

Objective Re-mortgage existing interest-only mortgage
Loan Required £60,000Property Value £250,000
Mr SmithMrs Smith
Age6057
Salary£28,000 per annum£10,000 per annum
State PensionFull State Pension at 65Full State Pension at 66
Pension Provision£200,000 pension fundNo private pension

The Smiths could be offered a £60,000 Retirement Mortgage. When Mr Smith buys an annuity with his pension fund he will need to provide a dependant’s pension of at least 50% to ensure that Mrs Smith would continue to afford the mortgage in the event of Mr Smith’s death.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration. Your home may be repossessed if you do not keep up repayments on your mortgage.

The Retirement Mortgage is a lifetime mortgage meaning that the capital does not have to be repaid until death or until the customer(s) enter into long term care. It has been designed as a flexible way of borrowing into retirement for those customers with retirement income who wish to repay the monthly interest.


Case Study: Retired professionals looking to borrow into retirement

Mr and Mrs Jones are retired head teachers, although Mr Jones still enjoys teaching on a part time basis.

Having each worked in the teaching profession for over 30 years, they benefit from a generous defined benefit occupational pension, which increases each year in line with inflation and provides a 66% dependant’s benefit on death.

Around 10 years ago they took out a mortgage and some personal loans in order to purchase a property to suit their needs in retirement. Although they’ve maintained their repayments they’ve approached their adviser as they require additional funds for home improvements. They’d like to explore their options on re-financing, as recent rises in the cost of living have started to eat into their remaining disposable income.

Objective Re-finance & home improvements
Loan Required £155,000Property Value£400,000
Mr JonesMrs Jones
Age7274
State Pension£8,791 per annum£8,684 per annum
Teacher's Pension£18,636 per annum£16,776 per annum
Part-time Salary£15,200 per annumNot applicable

A Retirement Mortgage of £155,000 would reduce the cost of Mr and Mrs Jones' existing borrowing and fund the home improvements required.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration. Your home may be repossessed if you do not keep up repayments on your mortgage.

The Retirement Mortgage is a lifetime mortgage meaning that the capital does not have to be repaid until death or until the customer(s) enter into long term care. It has been designed as a flexible way of borrowing into retirement for those customers with retirement income who wish to repay the monthly interest.


Buying a holiday home

Mr and Mrs Gold are directors of their own successful IT and property development businesses and require a mortgage to fund the purchase of a holiday home.

Flexibility is a key consideration for them, as they have no immediate plans to fully retire. They wish to repay the loan in full at some point in the future, but do not wish to have a specific timescale for doing so.

The Retirement Mortgage may be suitable for Mr and Mrs Gold as it has no pre-defined end date, offers a Flexible Repayment Option for capital overpayments, and there are no early repayment charges after 5 years.

Objective Holiday Home
Loan Required £200,000Property Value £950,000
Mr GoldMrs Gold
Age6065
Pension ProvisionSIPP Pension Fund £560,000Defined benefit pension income: £13,427 per annum
Defined contribution pension income: £3,118 per annum
Other Eligible IncomeEmployment Income: £150,000 per annumRental Income: £3,000 per annum Investment Income: £7,000 per annum

A Retirement Mortgage of £200,000 could allow Mr and Mrs Gold to purchase their holiday home. In this particular case, whilst earned income is high, affordability of the loan has to be maintained after retirement. As such the affordability assessment would include consideration of investment and rental income along with pension income.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration. Your home may be repossessed if you do not keep up repayments on your mortgage.

The Retirement Mortgage is a lifetime mortgage meaning that the capital does not have to be repaid until death or until the customer(s) enter into long term care. It has been designed as a flexible way of borrowing into retirement for those customers with retirement income who wish to repay the monthly interest.


These products are lifetime mortgages. To understand their features and risks, ask for a personalised illustration.

Next Page: Retirement Mortgage calculator