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 are the different types of 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.
Find out more about equity release
5. Rent out a room
If you have space, consider taking in a lodger. Under the Government’s rent-a-room scheme, you are allowed to make up to £7,500 a year tax free.
12 ways to make some extra money
Some 50,000 pensioners who claim means-tested pension credit get help with their mortgage interest. Until March 2018, it was paid direct to the lender. From April 2018, these payments stopped, and were paid instead as a loan secured against the home rather than as a benefit. If you got a letter from the DWP headed ‘Support for Mortgage Interest’, you must take action. If you agree to the loan, the payments (the same as before) will restart, backdated to April. The loan does not have to be repaid until the property is sold. If you don’t take the loan, and fail to make other interest repayment arrangements, your home could be at risk.
Is Equity Release right for you? Find out more here