Answer: The amount to settle does seem very high. With these mortgages, the borrower does not make any cash repayments. The interest charged is added to the loan each year, and your father would have been paying interest on the interest, so the rate of increase goes up rapidly and the amount due gets larger quickly.
There are often extra charges if the loan is repaid early. It is also usual for there to be a provision allowing the lender to sell the property six months after the borrower's death. Check the paperwork. If necessary, ask the lenders for a copy of the mortgage agreement.
For the past 20 years, most lenders have used agreed rules for this type of loan, under the Ship scheme. This involves the borrower receiving independent legal advice.
The lawyer advising your father should have discussed the terms of the loan with him, particularly any additional sums payable on settlement. Ask your father's lawyer to confirm that your father was fully aware of the repayment terms. If you do not get a satisfactory answer, contact the equity release council, which has taken over administration of the Ship scheme and may be able to help.
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Fiona is a partner in the residential real estate team at Thring LLP (www.thrings.com).
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.