Retirement Mortgages

Many people in their later years have a need to manage their estate planning, particularly in relation to inheritance tax liabilities. Others may simply want to realise a lump sum without disturbing other assets and investments. In both cases, the solution may be to raise funds against the value of your principal property.

If that sounds like you, our interest-only Retirement Mortgage may help. Available to personal clients aged 55 years or over, the loan amount is repayable on the sale of the property or, when the inevitability that we all face arrives and the last borrower passes away or moves into long-term care. Until that time, interest payments are charged and paid monthly. This differs from ‘lifetime mortgages’ offered by other lenders, where the interest or capital payments are accrued and compounded until the loan is repaid.

You can borrow against the value of your principal residential property

Loans of £200,000 to £2 million are available. The typical maximum loan to value (LTV) is 50%.

Smaller or larger amounts will be considered in consultation with a banking director.

The mortgage is repaid on the sale of your property, or when the last surviving borrower passes away or moves into long-term care

Unlike most other types of mortgage which have a defined repayment period, a retirement mortgage has no pre-defined loan term*.

The amount borrowed will be the final amount due, unless it has reduced following any lump sum repayments.

Interest is charged on the loan and is paid monthly

There is a monthly payment of interest due on the loan. This means the amount borrowed does not increase over the life of the loan, but the interest payment amount can decrease if any lump sum payments are made.

Affordability is assessed on income in later life and the ability to meet monthly interest payments

Our team will assess your ability to afford the monthly interest payments based on your actual or projected income and expenditure both going into and in retirement itself.

A typical assessment will consider sustainable sources of income such as current or future guaranteed or projected pension income. Unlike many providers, we can also consider your other income sources, for example, from investment assets or property rental.

* To calculate the annual percentage rate of charge (APRC) and issue a European Standardised Information Sheet (ESIS), we will assume the loan will mature when the youngest borrower reaches 85 years of age, unless instructed otherwise. A Lifetime Mortgage may be more suitable. All borrowing is subject to status and is available to persons of 55 or over. Interest to be paid monthly via a servicing account at Hampden & Co. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE.

Jeremy Vaughan
Our Retirement Mortgage service is designed to help clients enjoy greater financial flexibility during their later years.

- Jeremy Vaughan, Managing Director - Banking

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