Concessionary purchase

Neil lives at home with his parents. He is employed and has a well-paid job.

Neil’s parents have an interest only mortgage on the house they live in. The term is due to come to an end in 5 years. At this point the whole mortgage will need to be repaid in full.

One of the options would be for his parents to move to a repayment mortgage. However, the term is not long enough as the payments would be too high as they are close to retirement.

Neil can help with the mortgage repayments financially but did not know how he could manage this, with his parents being able to live in the property, as he was not on the deeds as a legal owner.

We were able to re-mortgage the property by completing a concessionary purchase.

This meant that his parents were able to sell the property to Neil, by gifting him the equity within the property to purchase it. Neil was able to take on the mortgage burden, to relieve his parents and the lender allowed them to remain in the property. With the mortgage now on capital repayment terms the balance will also reduce over time.

Please note, that the case study is based on a real-life scenario, but names have been changed due to client confidentiality.

Published March 2021.

It is important to take professional advice before making any decision relating to your personal finances. Information within this case study is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for information purposes only.