Our specialist mortgages get better with age

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1 Our specialist mortgages get better with age We ve made quite the name for ourselves in the specialist mortgage world and now we re extending our offering to later-life mortgages, too. So if your client wants to treat themselves in their retirement or get a head start on their inheritance, we ve got a mortgage with their name on it. intermediaries.aldermore.co.uk/later-life-lending

2 2 Later life lending

3 Later life lending 3 Market overview Worth 65bn in 2017 and estimated to rise to 142bn in 2027, the retirement lending market is embarking on a period of unprecedented growth. And as the traditional mortgage journey develops with more and more of the UK population taking their first steps onto the property ladder in their 30s or even 40s, the need for true later life lending mortgages is here. Two thirds of over-65s have been refused credit because of their age Those aged 65 and over represent the fastest growing segment of the UK population The housing wealth of the over-55s is worth 1.5trillion

4 4 Later life lending From first steps to first homes Audience segment We know it can be hard for younger generations to get onto the property ladder. But our later life lending mortgage range makes the home your clients worked hard for work for their family too. Meet the Browns Mr Brown is 60 and Mrs Brown is 60; their house is worth 425,000 and they have just 40,000 left to pay on their mortgage. Mr Brown is a sales manager earning 44,000 per year. He pays 110 a month into a pension and his employer matches it. He is due to retire in 2028 and pick up his state pension of 8,500 per year plus 3 frozen pensions worth 15,000, 9,500 and 10,000 respectively per year, of which his wife would receive 50% of on his death. Mr Brown also has a car loan in his name which he pays 125 per month for; the debt is due to finish in Mrs Brown is a manager in a shop; she earns 25,000 per year and pays 50 per month into her pension which her employer matches. She is due to retire in 2028 and pick up her state pension of 8,500 per year as well as a frozen pension worth 18,000 per year. Mrs Brown owes 575 on a store card but has no other debt. Their Later Life Lending needs They want to gift their two children 25,000 each to help them get on the property ladder, clear their existing borrowing and make some home improvements. They would like to borrow 100,000 and pay it back over 35 years on a capital and interest basis to make sure their monthly repayment is affordable. Their current provider will lend them the money but only on a 15 year term. How Aldermore can help Aldermore can lend them up to 210,573 over the 35 years.

5 Later life lending 5 Dream retirement begins at home Audience segment Whatever your client s plans for retirement, owning bricks-and-mortar gives them the freedom to do it their way, no matter how they want to use their equity. Meet the Greens Mr Green is 72 and Mrs Green is 68; they are both retired. Their family home is worth 385,000 and they are mortgage free. Mr Green collects his state pension which pays 8,000 per year as well as two other pensions paying 15,000 and 12,000 per year respectively. Each of these pensions pay 50% to Mrs Green on his death. Mrs Green receives her state pension which pays 7,500 per year as well as an income of 10,500 per year from a previous pension. Her pension also has the benefit of paying out 50% to her husband upon her death. Together Mr and Mrs Green pay a combined amount of 140 per month for life insurance; they have no other credit commitments and have 10,000 in savings for a rainy day. Their Later Life Lending needs They are looking for a capital raising mortgage totalling 65,000 payable over 25 years on an interest only basis to fund a new bathroom, kitchen and conservatory. The Greens have agreed that the repayment strategy would be to sell their house. How Aldermore can help Aldermore can lend them up to 237,970 over the 25 years they need.

6 6 Later life lending Don t wish to leave them a house, but help them build a home Audience segment 75+ Whether your client plans to leave savings or bricks-andmortar as their legacy, they ve worked hard for what they have. And sometimes it s nice to see that hard work pay off. Meet Mrs Grey Mrs Grey is 80 years old; her house is worth 495,000 and she is mortgage free. She receives a state pension which pays her 8,500 per year. She also has two personal pensions which pay 4,500 and 7,000 per year respectively. Following the passing of her late husband, she is also in receipt of his army pension totalling 9,000. Her Later Life Lending needs Mrs Grey has no credit commitments and is looking to borrow 50,000 to gift her five grandchildren 10,000 each to help with university and wedding costs and see them enjoy some of their inheritance. She wants to borrow the money on an interest only basis over 15 years and has decided that sales of property will be the repayment method. She really doesn t want to go down the Equity Release route after speaking with her neighbour. How Aldermore can help Aldermore can lend her up to 130,210 over the 15 years that she needs.

7 Later life lending 7 Sometimes moving forward means staying in the same place Audience segment Interest only If your client is worried about their interest only mortgage payments, we re here to make sure they don t have to leave the home they love. Meet the Whites Mr White is 63 and Mrs White is 59; their Interest Only mortgage has just two years left to run but they still owe 60,000. Mr White is a self-employed builder; his business is doing well and over the last 3 years his income has increased steadily from 39,000 to 42,000 and then 49,000 last year. He wants to retire at 65 in two years but won t receive his state pension of 8,500 until He does have three personal pensions which he can draw down from These give him an income of 8,000, 10,000 and 7,500 respectively, of which Mrs White would receive 50% upon his death. Mrs White currently works as a teacher earning 35,000, she will receive her state pension of 8,000 in 2027; as well as a final salary pension when she retires at 65 in Her final salary pension is worth 20,000 and Mr White is entitled to 50% upon her death. Their Later Life Lending needs The Whites have an endowment policy that matures in two years, but the 25,000 pay out falls short of their existing 60,000 mortgage debt. Their existing lender will extend their mortgage on a capital and interest basis but as they only lend up to the age of 70, the Whites could only get a seven-year-term, meaning they can t afford the monthly repayment amount. How Aldermore can help Aldermore can lend them up to 113,820 up to the age of 99, giving them a much more affordable monthly payment for the amount they want to borrow. Allowing them to use their endowment pay-out for much-needed home improvements and a once in a life-time holiday.

8 Correct at time of printing Aldermore Bank PLC. Aldermore Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. (Financial Services Register number: ). Registered Office: 1st Floor, Block B, Western House, Lynch Wood, Peterborough, PE2 6FZ. Registered in England. Company No Telephone calls may be recorded or monitored for security and training purposes. ARM