Second Home Options - Valerie


Using your properties to your advantage


  • 69 years old
  • Owns two properties
  • Main residence has a mortgage of £200,000
  • Second home is mortgage free
  • Wants to pay off her main residence mortgage 

Valerie has been retired for 9 years and is concerned that she won’t be able to repay her main residence mortgage when the term ends in 6 months’ time. She has a house in London, valued at £750,000, and a country cottage near Southampton valued at £450,000. 

She would like to keep both of her properties because her children enjoy spending time in both and she has strong emotional ties to the properties as a result.

Her outstanding mortgage is £200,000 and she knows that she can’t borrow money from a traditional lender because of her age. She has been made aware of lifetime mortgages and the fact that they can be taken out on primary residences and second homes.

By taking out a traditional lifetime mortgage on her primary residence, Valerie can raise £187,500, which is just under the amount she requires. She doesn’t have savings to use, so decides to take a Second Home lifetime mortgage too, allowing her to repay the £200,000 required.

Valerie was given the choice of paying off the interest and capital, or letting the interest roll-up meaning no monthly payments. She decided to let the interest roll up as having regular monthly payments felt like a commitment that could lead to stress, as she was already retired.

Key benefits:

  • Take advantage of the wealth tied up in two properties to increase borrowing potential
  • Retain both properties as assets
  • Flexibility to choose whether to make repayments

Important information

These case studies are worked examples and are for illustrative purposes only. Your customers will need to seek their own tax advice and you or your customers should not place any reliance on the figures illustrated in this case study.

Canada Life is not responsible for the suitability of any of the statements made in the case study, or for any financial advice you receive.

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