Mortgage which goes past 65th birthday

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Billy Baltic

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I'm with PTSB on 3.7% variable rate mortgage for LTV < 50%. As it stands my mortgage will run until I'm 69. I would like to reduce my monthly repayments - freeing up cash each month.
I talked to AIB and would in theory meet the requirements to switch but would need to reduce the term to my 65th birthday. Switching to them would leave monthly payments unchanged as a result.

What, if any, other lenders allow a PAYE employee to have a mortgage run over 65?
 
BoI: 70
KBC: 68

Note, will probably require proof of ability to pay past normal retirement age. I'm not sure how much this is relaxed with increase to pension ages.
 
RedOnion said:
BoI: 70
KBC: 68

Note, will probably require proof of ability to pay past normal retirement age. I'm not sure how much this is relaxed with increase to pension ages.
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Thanks for the responses. What would be acceptable proof of ability to pay? I have a standard DC pension but don't intend to be using that for mortgage payments. I have shares with current value in excess of mortgage balance but didn't think it would be considered when, by its nature, it's value fluctuates.
 
Your pension might suffice. They might also want to know if you've a mandatory retirement age or if you can work past 65.

It'll depend on your specific circumstances; your age now, the Mortgage amount, etc.

I'm not familiar enough with their underwriting to know the exact details. Given that AIB were happy with everything else you shouldn't have a problem getting a mortgage with any of them. If it was me I'd get in touch with whichever bank you'd prefer to deal with that has best rates, and ask them what they need before you complete a full application.
 
Billy Baltic said:
I have shares with current value in excess of mortgage balance
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I am wondering a bit about this part. You have shared in excess of the mortgage balance. In effect you are borrowing at 3.7% to purchase these shares? The return on the shares of around 7% per annum (guaranteed) to offset the cost of the mortgage.

Would you not consider
(a) selling the shares, paying off the mortgage and using the mortgage repayment amount to build the share portfolio back up again?
(b) selling some of the shares and making a lump sum payment against the mortgage, so you would be in a position to reduce the term to your 65th birthday so you make your mortgage application process easier and all banks are open to you?

Just a thought ! I know what I would do (done) at this moment in time...
 
gnf_ireland said:
I am wondering a bit about this part. You have shared in excess of the mortgage balance. In effect you are borrowing at 3.7% to purchase these shares? The return on the shares of around 7% per annum (guaranteed) to offset the cost of the mortgage.

Would you not consider
(a) selling the shares, paying off the mortgage and using the mortgage repayment amount to build the share portfolio back up again?
(b) selling some of the shares and making a lump sum payment against the mortgage, so you would be in a position to reduce the term to your 65th birthday so you make your mortgage application process easier and all banks are open to you?

Just a thought ! I know what I would do (done) at this moment in time...
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Thanks for your analysis and this is something I struggle with continually. The shares are in a basket of US based Pharma that I picked up over periods working for the companies. They are performing very well (appreciating) currently and dividend return is good.

I had hoped to get closer to Euro / Dollar parity before selling as I'd prefer not to lose so much on exchange, especially with a sizable CGT bill being involved. Feedback welcome on this thought process, as I question myself on a weekly basis over it.

Based on the advice on this thread I spoke with BOI and their initial feedback on mortgage into my late 60's was positive.
 
Billy Baltic said:
The shares are in a basket of US based Pharma that I picked up over periods working for the companies. They are performing very well (appreciating) currently and dividend return is good.
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Personally [since the dot com bubble not long after I graduated], I have a rule that I do not hold individual stock in companies or industries I work in, unless part of an overall managed fund. I work in the communications side of technology. My view is that if the industry/company is doing well, I will be rewarded as such and see my salary/bonus/income/daily rate rise accordingly. If the industry is doing poorly, I will experience the reverse. To properly diversify I need to consider different industries and not have all my eggs in one basket (income & savings). I saw too many people get stung alive in the dot com bubble that way.

Billy Baltic said:
especially with a sizable CGT bill being involved.
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CGT bill will be due at some stage. Its a matter of when you are willing to pay it? Do you have any losses to offset against it ?

Billy Baltic said:
Based on the advice on this thread I spoke with BOI and their initial feedback on mortgage into my late 60's was positive.
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Good to hear - at least it gives you options

Billy Baltic said:
Thanks for your analysis and this is something I struggle with continually.
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I was in a similar boat 9-12 months ago. I decided to cash in a good block of investments and have paid off the mortgage leaving a residual (I have a redraw facility on mine). I have since started to build up the savings again since. Yes, I was stung with the tax on them, but I am happy with my decision. Having the mortgage effectively cleared gives me more options in general.
If you think that the markets are high or you are over leveraged in Pharma, maybe consider reducing your exposure and putting against the mortgage. If you reinvest back in, you will benefit from averaging (if you believe that makes a difference)

Remember, you need to make ~7% on the money to be quids in, and the mortgage over payment is risk free.
 
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