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Remortgage house to provide a pension?

(11 Posts)
luanabanana Wed 12-Apr-17 14:32:33

Has anyone done this and would recommend it to me? I don't have anyone to leave my property to and could do with the pension TBH. I can only see an upside or am I missing something here?

senua Wed 12-Apr-17 14:35:13

Would you borrow money to put it in a savings account?

luanabanana Wed 12-Apr-17 14:37:13

After the mortgage is paid, I mean.

FanaticalFox Wed 12-Apr-17 14:37:31

Do you mean raise a mortgage on your mortgae free property to then live off? Rates are low so may be an idea to give you an income rather than just have an asset sat there doing nothing yet you can't retire coz you won't have any income. However i would recommend to get a good financial advisor to then invest this money to get you good long term return in a variety of investments and cash savings otherwise with inflation your funds will just get eaten away. Remember you'll still have to pay the mortgage as well.

KayTee87 Wed 12-Apr-17 14:38:25

But then you'd still have a mortgage to pay so surely it doesn't make much financial sense?

No1blueengine Wed 12-Apr-17 14:38:41

do you mean an equity release scheme? You will take a hit on the cash value of your equity. There are other options. You need to speak to a good independent financial advisor to help you plan this.

Moanyoldcow Wed 12-Apr-17 14:41:23

Personally I'd pay off mortgage asap, use mortgage-free years to save aggressively and then downsize at or just before retirement releasing equity to invest or buy an annuity (unlikely at today's rates though).

I wouldn't remortgage a house with a paid off mortgage.

luanabanana Wed 12-Apr-17 14:41:39

Yes, I think so No1 - the company would own the house and I could like in it until death. Then they take it.

Ifailed Wed 12-Apr-17 14:45:42

Are you trying to raise a lump sum for a pension pot before you retire? Presumably you have to continue to work whilst you pay off the new mortgage, so it does seem an inefficient way of funding retirement, why not just put the money you would spend on the mortgage into a pension fund which will attract tax-relief?

luanabanana Wed 12-Apr-17 14:45:42

live in it even!!!!

No1blueengine Wed 12-Apr-17 14:48:04

how far from retirement are you? You need a good lawyer to go with a fine tooth comb through the release agreement, specifically looking at any clauses that allow them to remove you from the property.

How much equity would they be taking? If it is 100% then i assume you would be paying them rent? If 50%, who has control of the property, who has responsibility for upkeep and maintenance?

You might be better off selling yourself and then buying somewhere smaller and cheaper and investing the remaining funds into an annuity, which will give you an income for the rest of your life.

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