Interest Only Lifetime Mortgage

This is a unique scheme that enables you to pay the interest on the mortgage each month so that the debt remains level. The Interest Only Lifetime Mortgage is increasingly popular for those that are switching from a traditional interest only lender who will no longer lend as the applicant has reached an age past which they are willing to lend, or for those that would like to raise finance in retirement and can afford to pay the interest on the mortgage.

How does it work?

With this mortgage you will normally have an interest rate that is fixed for the rest of your life. The interest charged is detailed at outset and will normally remain the same for the whole of the term. If there are two applicants the scheme will run until the last party either passes away or moves into permanent care.

This is ideal for those that have disposable income and need finance but also would like to protect some of the equity in their home and by paying the interest maintain the debt at a chosen level. Depending on the initial amount raised the applicant may be able to raise further funds in the future.

Most of these schemes also have the feature where they can change to a standard lifetime mortgage in the event that income drops. This may be where the retiree is currently working but can see that in future years they may fully retire and at that point may need to reduce outgoings. It is also of great comfort where with a married couple one client may have most of the income and should he or she pass away that income will either reduce or stop entirely. In this scenario it gives the surviving spouse the option of no longer paying for the mortgage and letting the interest accumulate.