About Anne
Anne is in her early sixties and lives by herself. She owns two properties, both mortgage free. She lets her buy-to-let property out on a 12-month assured shorthold tenancy and the property has recently been valued at £220,000. She’d like to make improvements to her home by converting her garage into an art studio.
Anne has a modest pension supported by the income from her buy-to-let property, which she doesn’t want to give up. She doesn’t have much in savings and her income isn’t enough to cover the refurbishment costs.
Concerned about not being able to use traditional lenders, she gets in touch with her financial adviser.
Now I’ve retired, I finally have more time to spend on my artwork. I’ve always wanted to convert my garage into an art studio, but have never had the money or time. I have a second property that I rent out, but don’t want to sell it as it’s a valuable income for me. I was concerned that I wouldn’t be able to find a lender to help me with my project.
A retirement dream come true
Her financial adviser confirms that traditional lenders would expect Anne to pass affordability checks and make monthly repayments, so she recommends a Canada Life Over 55 Buy-to-Let mortgage instead.
This buy-to-let mortgage allows Anne to release tax-free cash from her buy-to-let property with no need to make repayments. Anne could choose to repay up to 10% of her initial loan amount each year, meaning she can borrow the money she needs and make repayments to lessen the impact of interest on her loan, whenever it suits her.
Anne was finally able to complete her art studio conversion and enjoy her retirement as she’d always planned.
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 buy-to-let 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.
