Rudy Khaitan, managing partner of Senior Capital, spoke about the advantages of equity release for older homeowners. He said: “The right equity release mortgage product, particularly those that offer the greatest flexibility through limited prepayment penalties, can be the better option.”
Philip Jenner from Gloucester was left in a state of dread when his mortgage repayments more than tripled from £533 to £1,666 a month.
13:12, Thu, Aug 17, 2023 | UPDATED: 13:20, Thu, Aug 17, 2023
Philip Jenner with his wife (Image: Philip Jenner)
A pensioner was reduced to tears as he faced losing his family home after his mortgage repayments soared this year.
Philip Jenner, 70, “couldn’t see a way forward” for the Gloucestershie property that he shares with his wife and 11-year-old daughter.
He took out his mortgage in 2010 and had struggled to make the growing repayments since January 2023, with a balance then of £60,000.
The dad, from Quedgeley, said: “I was in tears on many occasions and could not see a way forward.”
With an interest rate of 6.77 percent, he faced the prospect of his repayments leaping up from £533 a month to £1,666 a month.
This included a repayment plan for developer Taylor Wimpey, and he had fallen short for the payments for this.
He tried to extend the term on the mortgage to slash the tripled payments but he was told he would have to buy out Taylor Wimpey first.
He then decided to try and use equity release on his property to free up extra funds to cover the soaring bills.
The homeowner was turned down by the main equity release brokers but was then put in touch with Ian Akeroyd, an adviser with 55Plus, who completed the scheme in July.
Philip Jenner with his family (Image: PHILIP JENNER)
Mr Jenner was able to release £65,000 and paid off his remaining interest and finish his mortgage repayments and retain the family home.
He said: “There are many like me, who have found themselves in a difficult position, with many brokers turning us down due to being in complicated situations.
“I was very lucky to have found Mr Akeroyd at 55Plus, who spent considerable time working out what was best suited in my circumstances.”
He has the flexibility to pay as much as he wants for the next 15 years so he has breathing space to manage his financial needs.
Mr Jenner added: “I feel the banks are not pulling their weight to help with the mortgage rate crisis. I know they’re not charities, but some support would have been appreciated.”
Advisers at 55Plus have seen equity release cases rapidly increase this year as homeowners over the age of 55 look for ways to tackle soaring mortgage repayments.
Jan Johnson, founder and director of 55Plus, said: “After more than a decade of residential rates at 0.75 percent or below, this has left many homeowners whose fixed deals are ending, and those on tracker mortgages, facing huge blows to their finances and even losing their homes as a result.
“We urge all homeowners over 55 to look at all options available to them. Expectations that borrowing costs might rise even further has pushed up mortgage rates.
“This month, the average residential rate on a two-year fixed deal hit a 15 year high of 6.66 percent.”
He said: “The right equity release mortgage product, particularly those that offer the greatest flexibility through limited prepayment penalties, can be the better option vs a more traditional mortgage when you want to unlock the value in your home without taking on additional monthly repayments.
“It allows homeowners to access the equity built up in their property, providing a tax-free lump sum to supplement regular income, whilst still retaining ownership and the right to live in their home for life or until they move into long-term care.”