Remortgage for a UK Client with Pension Income
Arranging a remortgage for a UK client with pension income requires careful presentation to lenders, particularly when the applicants are over 70 and not in traditional employment. Here we demonstrate how Articus Finance secured an interest-only facility of £400,000 against a £1.5 million property at competitive rates, despite high street restrictions, by leveraging private building society expertise.
Introduction: Remortgage for a UK Client with Pension Income
Clients receiving only pension income often struggle to access traditional lending, especially beyond the age of 70. Finding a suitable lender that recognises pension streams and future income projections is essential. This remortgage for a UK client with pension income showcases how Articus Finance successfully navigated restrictive mainstream policies and developed a bespoke solution that kept monthly commitments low and ensured long-term security of tenure.
Client Background
Our clients, a married couple resident in the South West of England, both beyond the age of 70 and reliant solely on pension income, approached us as their existing mortgage product was reaching expiry. Their family home was valued at £1.5 million. Their requirement was to remortgage with a modest advance of £400,000 on an interest-only structure to minimise monthly cash flow demands.
Although they held significant savings, they required a carefully structured remortgage that would preserve liquidity while avoiding costly repayment structures ill-suited to their pension profile. Their previous enquiry with mainstream lenders had highlighted age-related limitations and hesitation around sole reliance on pensions.
- Client: British nationals, married couple, over 70 years old
- Property: Family residence in South West England, valued at £1.5m
- Loan Secured: £400,000 on interest-only terms
- LTV: 27%
- Primary Challenge: Solely pension income and age exceeding conventional lending thresholds
The Challenge
Structuring a remortgage for a UK client with pension income carried several unique considerations:
- Age Restrictions: At over 70, many banks and building societies apply strict maximum-term restrictions or decline outright.
- Income Composition: Both clients derived income exclusively from pensions. Such income is acceptable to certain lenders provided future sustainability criteria are met, but many high street lenders rejected the profile.
- Liquidity Profile: While substantial savings supported the application, mainstream underwriting often gives limited weighting to capital reserves when clients seek ongoing affordability.
- Product Requirements: Interest-only terms were essential to keep monthly outgoings modest and manageable relative to pension inflows.
Without specialist intervention, the clients risked being denied mortgage refinancing despite substantial equity and strong financial standing.
Our Solution
Upon receiving instructions, Articus Finance undertook a comprehensive review of the couple’s financial profile, income sustainability, and property equity. Recognising that traditional high street solutions were unsuitable, we turned to our network of specialist building societies with bespoke underwriting approaches for pension-based borrowers.
- Careful Lender Matching: Identified a reputable regional building society with experience in lending to older borrowers.
- Pension-Focused Assessment: Presented actuarial projections of the clients’ pension streams to demonstrate long-term sustainability.
- Product Negotiation: Secured an interest-only facility of £400,000 against a property valued at £1.5 million (27% LTV).
- Competitive Rates: Despite perceived borrower complexity, we obtained highly competitive interest rates in line with market-leading structures.
- Simplified Process: Ensured minimal disruption to the clients’ lifestyle, handling all underwriting communications and requirements.
The mortgage was secured on time, alleviating concerns regarding their expiring product and ensuring continuity of low, sustainable monthly commitments.
Key Highlights
- Client: Married couple, UK-based, aged over 70
- Property: £1.5 million family residence
- LTV Achieved: 27%
- Loan: £400,000 interest-only facility
- Challenge: Sole reliance on pension income; age exceeded typical mainstream eligibility
- Outcome: Competitive product secured with a building society, full client satisfaction
Why Articus Finance Delivered
This remortgage for a UK client with pension income underscores Articus Finance’s value in securing mortgage finance for clients outside conventional banking criteria. Our private bank and building society connections enable favourable structuring even for clients beyond traditional lending ages. By presenting pension income as sustainable and pairing it with significant property equity, we overcame obstacles that deterred high street lenders.
This solution is part of our wider expertise across High Net Worth Mortgages, Private Bank Mortgages, Interest-Only Lending, Remortgage Strategies, and Foreign National Financing.
Explore Related Insights
- High Net Worth Lending
- Private Bank Mortgage Solutions
- Interest-Only Mortgage Insights
- Expat Lending Options
- Foreign National Financing
- Remortgaging Strategies
- Articus Finance Case Studies
- Borrower Insight Library
- FCA Guidance on Pension-Income Borrowing
Final Thoughts
This case demonstrates how a remortgage for a UK client with pension income can be achieved with careful structuring, even in complex circumstances. By leveraging specialist lender connections and presenting pension income as sustainable, Articus Finance secured a competitive interest-only facility that perfectly aligned with the clients’ needs.
