50+ mortgage case study: Pete & Vicki

Pete, a 56-year-old, self-employed computer programmer, has always worked from home and wanted to continue to do so. While 48-year-old Vicki, HR partner for large Bank, used to commute 40 miles-a-day to the office in the city but can now work from home permanently and travel to the city on the odd day.

This presented a problem as Pete had created a permanent office in the small box room upstairs, but meant Vicki had to work from the kitchen table which wasn’t ideal. They planned to extend the kitchen to include a permanent working space for Vicki, receiving quotes for the full extension and new kitchen at £60,000.

The home’s current value is £350,000 with a mortgage of £230,500, or 65% LTV. They’ve lived in the house for the past five years with their two teenage children, one first year at university and the other at home doing A levels. They were desperate to do the extension but didn’t want to over stretch themselves on a monthly basis. Ideally Pete and Vicky wanted a repayment mortgage as this is their forever home so had no plans to downsize.

As they’d need a 22-year term to make the mortgage affordable for them, their broker had trouble finding a lender to take into account income past age 70 or at best 75 without using pension income. Pete has not being paying into a pension for a number of years since he became self-employed and while Vicki does have a pension, she has worked part-time previously while looking after the children, therefore their pension pots were not enough to secure a mortgage with another lender.

Hodge offered a solution in the form of a remortgage of £290,500, or 83% LTV, providing the additional £60,000 for the extension.

To make the monthly repayments affordable they needed a 22 year term, taking Pete to age 77 and Vicki to age 70. Pete has no plans to retire as he loves his work and therefore will continue well into his 70’s, Vicki will continue to work until she is 70.

Hodge can take earned income to age 80 if it’s feasible and with a 50+ mortgage, only one applicant needs to be age 50. Hodge offers a max LTV of 85%.

For intermediaries only. This is a hypothetical example. It’s not an indication of likely or possible benefits or what we think will happen in the future. It’s not advice of a recommendation from us.