Solution
An ageing, active, asset rich generation could be your next big investment opportunity
Retirement Interest Only Mortgages
Retirement Interest Only mortgages are standard residential mortgages, designed for older borrowers, whereby lenders will not seek repayment of the loan until a specified life event, i.e. passing away, selling the property when they downsize or entering long-term care.
Until this life event occurs, the borrower is only responsible for repaying the monthly interest of the loan – meaning they have effectively “fixed” their mortgage for life with the capital repaid upon the specified life event.
Eligibility
The youngest borrower must be over 50 years old.
Demonstrate affordability (Applicants must pass affordability individually for joint applications).
The property must also form suitable security for the loan.
High level of credit quality (prime borrowers only).
Two key advantages
There is no maximum age limits on who can borrow providing they can meet monthly interest payments upon application and in the future during retirement.
Because borrowers make payments each month, there is no compound interest on the loan – meaning they maintain low-cost payments and leave a larger inheritance to loved ones.
We can build a long-term credit history and check affordability
The key to securing a mortgage is “affordability”
Assessing income both on application and into retirement. Upon application the mortgage provider will request proof of income against the borrowers outgoings.
If the loan extends beyond the expected retirement date, borrowers must demonstrate they will have a secure level of income in retirement to continue making interest only payments.
Accepted sources of income:-
Pension income or future entitlements
Investment income
Residential rental income
Commercial rental income
Spousal/maintenance income
Subcontractor income
Age is just a number, we take a more positive view of older borrowers
Traditional high street lenders often take a very narrow, and negative view, of borrowers
If you are able to look beyond the applicant’s age and focus on their financial resources, it is likely that most people have long term sustainable income from work, pensions and investments way beyond a “traditional” retirement age. Good borrowers looking to refinance their home and unlock trapped equity, should not be penalised.
More favourable and flexible options
A mortgage may help people to free up the wealth tied up in their property. Often, people’s property is worth more than their pension and by using a mortgage to release cash, it could provide the funds that may be needed in retirement.
Gift loved ones an early inheritance and be able to see them benefit from the support. For example, by helping children or grandchildren get on to the housing ladder, or maybe help them through harder times.
The “Bank of Mum & Dad” is the 6th largest lender in the UK. In 2019 families lent £6.3 billion, the average loan was £24,100, rising to £31,000 in London. £16.4 billion has been supplied into the housing market to help offspring onto the property ladder.
Remortgage. For example, it could help those with an existing interest only mortgage which is coming towards the end of its term, or those on a higher interest rate.
Use a mortgage to buy a new property or making other yielding investments to help grow capital during retirement years.
Investor Relations |ir@mansardcapital.com Malta Head Office | 2nd Floor, Airways House, High Street, Sliema SLM 154, Malta
Mansard Capital Management Ltd are registered in Malta with registered number C50163, authorised and regulated by the MFSA. Any offering of interests in Mansard Capital Sicav p.l.c. and its sub-funds (referred to as Fund) will be made only by means of a definitive confidential offering memorandum and offering supplement (a “Memorandum”) in respect of the Fund, which Memorandum will contain a description of the material terms and risks of the Fund. Any investment by a recipient of this document in such Fund will be wholly and exclusively on the terms of any relevant Memorandum and no such investment shall be deemed to be subject to or affected in any way by any matters referred to herein. This document has been furnished on a confidential basis, following request by the person concerned and for the use of the person to whom it was delivered and may not be reproduced, in whole or in part, or delivered to any other person without the prior written consent of the Fund. This term sheet and accompanying material are directed only at persons having professional experience in matters relating to investments and who are regarded as “Professional Investor” or “Qualifying Investor” as described in terms of the applicable Investment Services Rules and who qualify as such. Transmission of this term sheet to any other person may contravene the Investment Services rules requirements and no such person shall be entitled to act upon it. The past is not a guarantee of the future and the value of the investment may go up as well as down. Reference should be made to the risks section in the Memorandum. Mansard Capital Management acts as investment manager to Mansard SICAV, in some cases, there may be situations that give rise to a conflict of interest. A conflict can arise when the Directors, Shareholders or employees have interests, ownership, and/or shareholding in the external investment companies in which the fund invests. Neither this term sheet, nor any representations made herein are approved or endorsed by the Malta Financial Services Authority. Mansard Capital Sicav p.l.c. (the “Company”) is a collective investment scheme established as a multi-fund investment company with variable share capital (SICAV) incorporated with limited liability under the laws of Malta and licensed by the MFSA under the ISA as a Professional Investor Fund targeting Qualifying Investors.
