If you are feeling the pinch in the light of increased mortgage rates, you are probably looking at ways to reduce costs in all areas of your life. With mortgage rates now at a fifteen year high and a cost of living crisis affecting everyone, hundreds of thousands of homeowners are left in limbo regarding how they can maintain their standard of living. Here, we look at some of the facts about mortgage rates and the benefits of plans like Lifetime Mortgages and Home Reversion for the over 55’s for paying off debts and living more comfortably.
It can be extremely difficult to find ways to pay for your mortgage, with some increases leaving people needing to find hundreds of pounds extra per month. Some homeowners approaching the end of their fixed terms are looking at alternative providers, or extending the length of their term in order to bring monthly payments down; however this does not happen with interest-only mortgages. Some may also look into interest-only payment periods, or short-term payment holidays, if these are things that providers will offer.
The first step is to talk to your mortgage lender and explain that you are having difficulty with payments. They should be your first port of call as they are in the best position to offer you any kind of payment holiday or freeze on your interest. If you are late or miss any payments without explaining why, your credit score will be affected and this can have knock-on effects across the board and may result in you being denied loans in the future.
As mentioned above, extending the term of your mortgage could bring your monthly payments down, however it will increase the mortgage debt in the long run. Similarly, any payment holidays or breaks you can take will help in the short term but the debt will increase and still be there and will need to be repaid eventually. We recommend looking into Equity Release plans, such as a Lifetime Mortgage, as this can help homeowners over the age of 55 to pay off their mortgage in its entirety, eradicating monthly payments and allowing for a better quality of life as they approach or in retirement.
The cost of living crisis is affecting all aspects of life in the UK, from energy bills to the supermarket prices. Removing your mortgage payments from the equation can help move you towards financial freedom and give you peace of mind. Equity Release lifetime mortgages allow you to release money built up in your home so you can pay off your mortgage and remain in your home until you pass away or enter long-term care, safe in the knowledge that the sale of your home can pay off any remaining mortgage and interest. For many older homeowners, it could be the solution to solve the financial hardship creeping in as the mortgage crisis continues.
Make sure you work with a member of the Equity Release Council, like Bower. We have the knowledge and experience to help you navigate the Equity Release landscape so you can make the right decision for your lifestyle. Speak to an adviser today and make steps towards financial and home security.
