Later Life Borrowers: what type are you?
When it comes to borrowing in later life, there are many different reasons for wanting or needing to access cash tied up in the home and a wide range of ways in which that money is put to good use. In this section we look at the four key Later Life Borrower personalities and the motivations that drive their lending needs.
The debt managers
Mary (59) is one of the UK’s estimated 47,000 so-called “mortgage prisoners” – she has an existing Capital and Interest mortgage and is up-to-date with her repayments, but she is unable to move to another standard mortgage deal because she doesn’t meet lender requirements in terms of affordability.
She wants to remortgage in order to reduce or remove her interest repayments altogether and make her finances more manageable as she often finds her monthly outgoings exceed her income.
Later life borrowing options could provide Mary with the finances she needs to repay her existing mortgage while also freeing up income each month with lower or even no repayments.
The retirement boosters
Frances (68) and Joel (72) have both recently retired and are still adjusting to a new lifestyle on a lower, fixed income than they were used to when they were working. They don’t regard themselves as “hard up” – they have enough money to get by and pay the monthly bills – but they want to really enjoy their retirement years and not have to skimp on luxuries.
They are considering later life borrowing as a way of boosting their retirement funds, giving them the chance to do things they couldn’t do before, including an extended trip to Australia to visit their daugther and grand-daugther. A downstairs ‘wet room’ is also on the wish list as Joel now struggles a bit on the stairs due to a recent hip operation.
The gifters
James (65) and his wife Kate (64) have a very comfortable retirement. Their pension incomes pay for everything they need and want to do and they have a beautiful, mortgage-free property that they regard as their “forever home”.
They want to help their children – both in their early Thirties – get on to the property ladder by gifting them a significant deposit of £50,000 each in order to help them both get a better mortgage deal. As they don’t have enough in savings or investments to cover this, they want to use later life borrowing in order to unlock some of the equity they have in their property.
The property purchasers
Nora (73) was widowed three years ago and she has recently been thinking about the next chapter of her life.
She has been considering buying another property in her favourite sea-side location that’s also closer to some of her family. It could be a small holiday cottage, somewhere for her to get away and unwind. Or she may need a larger home for a permanent move to begin a new adventure.
Either way, later life borrowing could provide the additional funds she needs to complete the purchase of the new property and also pay for the renovations she’s keen to make.
