Ejected from your home: The interest-only shock could wreck your final years


Len and Val FitzgeraldNC

Len and Val Fitzgerald face to face their home being repossessed after their mortgage wing was denied

This is the horror facing Len and Val Fitzgerald, a retired couple in their mid 70s, whose lender Santander is refusing to keep up the interest-only mortgage on their two-bedroom Victorian terrace.

Their the actuality is particularly worrying because hundreds of thousands of Britons could be in a like position when their interest-only mortgages mature with no augurs of clearing the debt.


Len, 77, and Val, 76, bought their Eastbourne to the quick in 2003, after returning from working in Africa: “We had good emoluments, the kids were off our hands and we took out a repayment mortgage with foresees to clear the debt in 10 years.”

However, their income dropped when Val lost her job and Len left the same firm soon after, and they alt the mortgage to interest-only to manage the repayments.

All we are asking for is the suitably to live here for another 10 years, before moving into a about

Len Fitzgerald

Len has not worked since an operation for lung cancer in 2011, but the yoke have always covered their mortgage interest: “We have on no occasion missed a single payment.”

They now owe £180,000 on a property valued at £250,000, a spaced out loan-to-value (LTV) of more than 70 per cent, which rules out downsizing or impartiality release.

Consequently, they face selling up and finding a cheap rental characteristic instead.

“All we are asking for is the right to live here for another 10 years, prior to moving into a home,” Len said.


The couple are supported by Eastbourne MP Stephen Lloyd, who has queried Santander to extend their mortgage: “This is a frail elderly combine who have always paid their mortgage interest on time, yet the bank ups to allow anyone over 75 to retain an interest-only mortgage. Santander is ready to throw Len and Val into the street, which is a shocking and callous decision.”

He asked Santander chief executive Nathan Rostock to follow competitors such as Nationwide, which advances to 85, or abolish its age limit altogether: “We are all living longer and major entitles such as Santander have to adapt.”

If someone can keep up their mortgage payments they should be allowed to combustible in their home whatever their age, Mr Lloyd added.

Elderly woman looking through her finances GETTY

Santander’s age cut off is 75 whilst Nationwide’s is 85

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Santander told the Express that it previously allowed the Fitzgeralds to confer their mortgage term for eight years to October 2015, with an contract to repay the debt by selling the property.

It has refused a further extension because that would run lifestyle its maximum age of 75 and it considers the loan would become unaffordable.

After the Monetary Ombudsman Service agreed that a further extension was not in the best interests of the fellow, Santander began legal proceedings for possession, with a court pass set for the end of this month.

It has given Len and Val a two-month extension to explore options such as remortgaging or push, plus six months to conclude any sale.

A spokesperson said: “Santander wishes always try to support our customers but it is not in the interest of either customers or the bank to be applicable in circumstances where we believe lending will become unaffordable.”


David Hollingworth, associate director at broker L&C Mortgages, said sundry lenders reduced their maximum ages following legislation elicited the Mortgage Market Review, which aims to reduce unaffordable beholden in retirement: “NatWest imposes a maximum age of 70 at the end of the mortgage term, while Coventry Erection Society lends up to 75, Skipton and Halifax to 80 and Nationwide to 85.”

Derivation Building Society lends into the late 80s, while Marsden can fit to 91 in some cases, he added. Equity release lender Hodge Lifetime recently despatched a new interest-only mortgage that may run to 95.

In most cases, applicants must divulge they have sufficient income to meet interest and debt repayments. Lenders may take a tougher line on interest-only borrowers, for example Leeds and Mansfield structure societies will lend up to 80 and 85 respectively, but cut this to 70 and 80 for interest-only lends.

Elderly couple looking over their financesGETTY

Those worst affected are older homeowners who took out mortgages in the 1980s or 1990s


Adrian Anderson, director of mortgage broker Anderson Harris, bring up innovative mortgages for the elderly are appearing, such as Family Building Culture’s Retirement Lifestyle Booster and Shawbrook Bank’s interest-only product for the over-55s.

“Anybody with an interest-only mortgage be compelled have a strategy to pay off the capital, whatever their age,” he added.

City watchdog the Fiscal Conduct Authority (FCA) recently warned that nearly 1.67 million mortgage holders be subjected to an interest-only deal, of whom 70 per cent are over 45, and hundreds of thousands hazard losing their homes.

Worst affected are older homeowners who embraced out a mortgage in the 1980s and 1990s backed by an underperforming endowment plan, with the FCA counsel problems will peak over the next 14 years.

Get ahead Harris, boss of mortgage broker SPF Private Clients, said lenders set zenith ages because there is a risk in allowing lending to continue indefinitely: “Pursue early independent advice if you are struggling to pay off your mortgage in time.” You cannot rely on lender leniency: Len and Val Fitzgerald are a originate go warning of how it feels to be caught in the interest-only trap.

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