CLEAR YOUR MORTGAGE BEFORE YOU RETIRE
Growing numbers of us are heading into retirement with mortgage debt. And the number is likely to grow as young people get on the housing ladder later and borrowing more over a 35 or 40-year term, rather than 25. It only takes a life hiccup to run into trouble, Hargreaves Lansdown finance analyst Sarah Coles says. “If you lose your job, fall ill or divorce, it could soon push your final repayment date back.” She has these tips to help: Remortgage to a cheaper deal.
Make overpayments now. Today’s low savings rates means your money works harder paying down debt.
Work later in life, if you are well enough.
Use your 25% pension tax-free lump sum to clear debt. But this could leave you struggling throughout retirement. Downsize, if you are happy to.
Consider an equity release lifetime mortgage, which allows homeowners to borrow against the value of their home while continuing to live there. Seek advice as this is a complex area, though.