Over 55 Buy-to-Let Options - Maria

 

Paying for care 

Maria:

  • 80 years old
  • Moved out of her primary residence
  • Now living in residential care
  • Needs to fund care costs

Maria moved out of her property and into residential care in May 2013 and her property has been rented out with a 12 month Assured Shorthold Tenancy (AST) agreement since April 2014. She needs to raise some capital to pay for her care, but doesn’t want to sell her property because it provides a rental income.

Traditional lenders will not lend to Maria because she’s already in care, so she was concerned that she was going to have to sell her property.

By taking out an Over 55 Buy-to-Let mortgage she can release money from her property. She does not need to make any repayments, and she can use all of the cash to fund her care.

Her property is worth £450,000 so she can raise up to £175,500. She can raise this in one lump sum, or she can borrow a smaller amount up front and borrow more in instalments by taking out further advances when required. She continues to receive a rental income, which can also support her care fees.

Maria is therefore able to keep hold of her income generating family home, with no affordability checks or minimum income requirements. At the same time, she and her family still have the flexibility to sell the property and release the remaining equity in the future. 

Key benefits:

  • Pay for care and still pass on family home to children
  • Loan does not need to be refinanced during her lifetime
  • She still owns an income-producing asset
  • Security of a fixed interest rate for life

Important information

This case study is a worked example and is for illustrative purposes only. We have taken care to ensure the information is accurate, but we accept no liability for any of the information we provide that you decide to use or for the suitability of any of the statements made. Individual financial advice and tax advice should be sought prior to taking out a lifetime mortgage, as releasing equity can change the inheritance tax position of the borrower and their estate, as well as potentially altering their eligibility for welfare benefits.

Find out more about our Over 55 Buy-to-Let Options here.

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Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

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Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.