Top five tips for paying off your mortgage

06 November 2014 ( 14 June 2017 )

Many people who are coming up to retirement or who have already stopped working still have a mortgage to pay off. So what are the best ways to try to reduce this debt?

1. Extend the term of your loan

Reduce monthly repayments by extending how long you have to clear your mortgage. This will however increase the total amount, including interest, you have to pay. And not all lenders will allow older people to do this.

2. Use your pension

If you are about to start drawing your personal or company pension, you can currently take a quarter of it as a tax-free lump sum, which can help pay down your mortgage.

Find out more about unlocking your pension.

3. Consider equity release

Your home may have increased considerably in value since you bought it, so you may be able to sign up for equity release to generate cash and pay off your loan.

What is equity release?

4. Switch to a cheaper deal

Speak to your lender or a mortgage broker about moving to a loan with a lower interest rate. Again, banks can be less willing to give new deals to those past retirement age.

5. Rent out a room

If you have space, consider taking a lodger. Under the Government’s rent-a-room scheme, you are allowed to make up to £7,500 a year tax free.

Find out more about equity release.

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.