Can’t Afford Your Mortgage but Don’t Want to Move? You May Have Options
Worried that your mortgage is becoming unaffordable but don’t want to leave your home? You’re not alone — and selling may not be your only option.
Changes in income, retirement, rising household costs, an interest-only mortgage approaching its end date, or simply having a mortgage that has become difficult to maintain can leave homeowners wondering what to do next.
The good news is that there may be ways to make your mortgage more manageable and allow you to stay in your home.
As experienced mortgage advisers, we can look at your individual circumstances and consider options that may not be immediately obvious.
1. Could extending your mortgage term reduce your payments?
One of the simplest ways to reduce your monthly mortgage payment can be to extend the mortgage term.
For example, spreading the mortgage over a longer period could reduce the amount you need to pay each month.
However, a longer term generally means you could pay more interest over the life of the mortgage, so it's important to consider the overall cost and whether the mortgage will remain affordable in the future.
2. Could an interest-only mortgage help?
If your circumstances allow it, moving from a repayment mortgage to interest-only could significantly reduce your monthly payments.
Instead of paying the mortgage capital each month, you would generally only pay the interest.
However, you still need a suitable strategy for repaying the capital, so this isn't right for everyone.
3. Could you remortgage?
Your existing lender may not necessarily offer the most suitable solution for your circumstances.
A remortgage could potentially:
- Reduce your monthly payments
- Change the mortgage term
- Move you to a more suitable product
- Restructure your borrowing
- Help you move away from an unsuitable mortgage arrangement
A whole-of-market mortgage adviser can assess your circumstances and search a range of lenders rather than simply looking at what your current lender offers.
4. What if you're approaching retirement?
This is where things can become more complicated.
Traditional mortgages can become difficult to obtain as you get older, particularly if you have limited earned income or your existing mortgage runs beyond your expected retirement age.
However, later-life lending may provide alternative solutions.
Depending on your age, income, property value and circumstances, options could include:
Retirement Interest Only (RIO) mortgages
A RIO mortgage can allow you to continue living in your home while making monthly interest payments.
The mortgage capital is typically repaid when the property is sold, for example when you die or move permanently into long-term care.
Equity release
For homeowners aged 55 or over who meet the relevant criteria, equity release could potentially allow you to access some of the equity in your home.
One possible use is to repay an existing mortgage, allowing you to remain living in your property.
Equity release is a major financial decision and can affect your estate, benefits and future financial position, so specialist advice is essential.
5. What if your interest-only mortgage is coming to an end?
This is becoming an increasingly important issue for homeowners.
If you have an interest-only mortgage and don't have enough money available to repay the capital at the end of the term, don't ignore the problem.
There may be options available, including:
- Remortgaging
- Extending the mortgage term
- Reviewing the repayment strategy
- Moving to a RIO mortgage
- Considering equity release
- Selling the property as a last resort
The earlier you seek advice, the more options you may have.
6. What if you have significant equity in your home?
You may be surprised by how much difference the equity in your property can make.
For example, if your home is worth £500,000 and your mortgage is £150,000, you have approximately £350,000 of equity.
That doesn't automatically mean you can borrow more, but it could give you more options when restructuring your mortgage.
This is particularly relevant for older homeowners who may have substantial property wealth but a relatively low monthly income.
Don't assume that selling is your only option
If you're struggling with your mortgage, it can be tempting to think:
“I can't afford the payments, so I'll have to sell my home.”
That isn't necessarily the case.
There could be alternative mortgage and later-life lending solutions that allow you to remain in your home.
The important thing is to look at the whole picture — your income, expenditure, age, mortgage balance, property value, existing mortgage, future plans and how long you want to remain in the property.
How we can help
As experienced mortgage and later-life lending advisers, we can review your circumstances and explain the options available to you.
We can look at standard mortgages, remortgages, Retirement Interest Only mortgages and equity release, where appropriate.
Our aim isn't simply to find you another mortgage. It's to understand what you're trying to achieve and find a solution that is affordable and appropriate for your circumstances.
Don't wait until your mortgage becomes a crisis.
If you're worried about your mortgage payments or you're approaching the end of your mortgage term, talk to us before making any decisions about selling your home.
You may have more options than you think.
Get in touch today for a confidential conversation about your circumstances.
Frequently Asked Questions
What can I do if I can no longer afford my mortgage?
If your mortgage payments have become unaffordable, don't assume that selling your home is your only option. Depending on your circumstances, you may be able to extend the mortgage term, remortgage, consider an interest-only arrangement, or explore later-life lending options such as a Retirement Interest Only mortgage or equity release.
Can I stay in my home if I can't afford the mortgage?
Potentially, yes. There may be ways of restructuring your mortgage to make the payments more affordable. The options available will depend on your income, age, property value, mortgage balance, credit history and individual circumstances.
Can I reduce my monthly mortgage payments?
Possibly. Options could include extending the mortgage term, changing the mortgage product or, where suitable, considering an interest-only mortgage. However, reducing the monthly payment can increase the overall amount of interest you pay, so the long-term cost needs to be considered.
Can I extend my mortgage term?
In some circumstances, yes. Extending the term spreads the mortgage repayments over a longer period and can reduce the monthly cost. Lenders will consider factors such as your age, income, affordability and the proposed mortgage term.
Can I change my repayment mortgage to interest-only?
Potentially. Some lenders may allow a switch to interest-only if you meet their criteria. You will normally need to demonstrate how you intend to repay the mortgage capital in the future.
What happens if I have an interest-only mortgage that is coming to an end?
If you don't have enough money to repay the mortgage when it reaches the end of its term, you should seek advice as early as possible. Depending on your circumstances, you may be able to remortgage, extend the term, arrange a Retirement Interest Only mortgage, consider equity release if eligible, or look at other solutions.
What is a Retirement Interest Only mortgage?
A Retirement Interest Only (RIO) mortgage is designed for older borrowers who can afford the monthly interest payments but may not be able to repay the mortgage capital during their lifetime. The capital is usually repaid when the property is sold, for example following death or a permanent move into long-term care.
Could equity release help me stay in my home?
For eligible homeowners aged 55 or over, equity release could potentially provide funds that may be used to repay an existing mortgage while allowing you to remain living in your home. Equity release can have significant long-term implications, so specialist advice is important.
I have lots of equity in my home but a low income. Can I still get a mortgage?
Possibly. Having significant equity can be helpful, but lenders still need to consider affordability and their lending criteria. For older homeowners, later-life mortgage options may provide solutions that aren't available through a standard mortgage.
Should I speak to my existing lender first?
If you're struggling to make your mortgage payments, you should contact your lender as soon as possible. They may have support options available. You can also speak to a mortgage adviser to understand whether alternative mortgage or later-life lending solutions may be available.
Will I have to sell my home if I can't afford my mortgage?
Not necessarily. Selling may be one option, but it shouldn't automatically be assumed to be the only solution. Depending on your circumstances, there may be ways to restructure your borrowing and remain in your home.
When should I seek mortgage advice?
As early as possible. The sooner you seek advice, the more opportunity there may be to explore different solutions. Don't wait until you have missed payments or your mortgage term is about to expire.
Can a mortgage adviser help if my circumstances are complicated?
Yes. A specialist mortgage adviser can look at your overall circumstances, including your income, age, property value, mortgage balance, credit history and future plans, and explain which options may be available.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.