Can you really save a house deposit on the UK’s average salary?
We're cutting through the noise and answering the question honestly - is the UK's average salary really enough if you're saving for a house deposit.
We believe lending should be more flexible. Whether you’ve got an existing mortgage to switch from, want to minimise your monthly payments, or free up funds to make home improvements, our Resi Retire mortgage was created to help you achieve your lifestyle goals into and during retirement.
What is a Resi Retire mortgage?
Our Resi Retire mortgage is a mortgage with a set term, designed to take your lending into retirement.
If you choose our interest only option, you will make just the interest payments each month and you will need to have a way to repay the mortgage at the end of the term. This could be through sale of property (main residence or second home) or cashing in investments or assets.
If you choose our repayment mortgage and make all of your payments, you will have repaid your mortgage in full at the end of the term.
Is the Resi Retire mortgage right for me?
Our Resi Retire mortgage is specifically designed for people who find mainstream mortgages either unsuitable for their particular needs, or not applicable due to complex incomes. If you’re interested in getting a new mortgage on your main residence, here are the eligibility criteria we consider.
Affording your mortgage
How much you can afford to repay each month is essential for any type of mortgage, we need to make sure the loan remains affordable for you not only today but also in the future.
To help you access the amount you can borrow we will look at both your current and future income to find a solution that reflects your individual circumstances.
Each case is reviewed by an experienced member of the Mortgages team. Everyone you speak to has a thorough understanding of both working and retirement income and you can be sure they’ll take a common-sense approach to each case.
Examples of the types of income we will consider are:
- Income from employment or self-employment
- Working income up to age 80 where plausible.
- State, personal and company pensions, whether in payment or not
- A sliding % of your pension pot based on the age you plan to draw it down.
- Investment income
- Rental income
We recommend discussing your options with a financial adviser before deciding which one suits your financial position best.
The benefits of retirement mortgages
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You get a financial solution catered for your particular life stage
Most retirement mortgages have been created to help people who are working towards retirement, to live comfortably and be in a position to afford the monthly payments.
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You get to keep equity in your home
Our Resi Retire mortgage lets you keep the equity in your home.
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A loan term to suit your individual circumstances
Our Resi Retire mortgage is designed so you can enjoy financial freedom.
Eligibility and criteria
How much you can afford to repay each month is essential for any type of mortgage loan, but it’s even more important when it comes to our Resi Retire mortgage. Considering the full amount borrowed is due to be paid at the end of the mortgage term, we need to make sure the loan remains affordable for you not only today, but also in the future.
A financial adviser will be able to assess if this is the right financial solution for you. It’s important to get advice from one before making up your mind.
We’ll take a number of sources of income into account to make sure you can afford the loan, including:
- Pension income or future entitlements
- Investment income
- Rental income
- Commercial rental income
- Ltd company residential rental income
- Holiday rental income
- Spousal/maintenance income
- Sub-contractor income
- Some benefits (see your financial adviser or mortgage broker for more information on what we will and won’t accept)
FAQs about retirement mortgages
The Resi Retire mortgage has a choice of fixed term up to 41 years. For those who are employed or self employed, we will consider income up a maximum age limit of 80 years – based dependent on occupation.
Borrowing up to 95% LTV is available on repayment or 80% on interest only subject to affordability. The minimum loan size is £20,000 and maximum is £2m for interest only and £3m for repayment. We want to make sure the Resi Retire residential mortgage remains affordable now and in the future. This is why we base the final amount we’ll lend on your ability to afford the loan.
This includes your employment income (including self-employed) and retirement income that’s currently being paid, or forecast to be paid upon retirement. We’ll also look at outgoings including any loans or financial commitments already in place.
For the interest only mortgage option, it’s essential for the repayment strategy to offer you sufficient funds to repay the loan at the end of the term. This is why consulting with a financial adviser is important before deciding which mortgage product is best for your financial situation.
If you’re over 50 and looking to get a mortgage, the first step is to speak to a financial adviser. They can help you understand the amount you’re able to borrow.
If you’re interested in finding out more about our Resi Retire residential mortgage, then the first step is to speak to a financial adviser – they can help find out how much you can afford to borrow and if you’re eligible to get a mortgage.
You can choose a repayment mortgage or interest only for the Resi Retire. Repayment means your monthly repayments cover the interest and the amount you’ve borrowed. At the end of the term you won’t owe anything.
For Resi Retire interest only a repayment strategy is required for when your mortgage ends. As long as you’ve kept up with your payments, the final amount you owe us will always be the same as the amount you initially borrowed, regardless of whether your home goes up or down in value.
You can take out our Resi Retire mortgage either solely, or with someone else. We look at a wide range of income types (like pension, investments, and rental), and your adviser will be able to help you work out the best course of action. We look at all applications on a case by case basis, and try to be as flexible as we can.
You can repay the loan at any time, but you might incur early repayment charges if you do – depending on the circumstances.
The loans can be repaid at any time; however, an early repayment charge applies in the first five years for five year fixed rates and the first two years for two-year fixed rates.
See our product summary for full details.
During any initial fixed rate or discount period, overpayments of up to 10% can be made off the capital without incurring early repayment charges.
Paying interest on your mortgage could impact the income needed to fund your retirement. We encourage you to discuss retirement plans with your independent financial adviser to make sure you can still afford your mortgage, even if your circumstances change.
Hodge is a responsible mortgage lender, so if your circumstances change then please contact us to find out the best way forward. Our mortgages for over 50s are portable, which means they can be transferred with a house move if you wish to move or downsize. As the borrower, you’ll be responsible for the cost of transferring your mortgage, and your new home must form suitable security for the loan.
If your marital status changes, we can accommodate this too.
We review the Standard Variable Rate regularly. The standard variable rate may change to reflect changes in the Bank of England base rate or due to our funding or administration costs, economic effects and the impact of new laws or regulations. If it changes, we’ll always give you reasonable notice as to how this will affect your repayments, if at all.
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