Lifetime Mortgages

Lump Sum Lifetime Mortgages

This is a scheme that enables you to release a large lump sum from the equity within your home.  This can be utilised for anything; from clearing an existing mortgage or debts to funding a new car purchase, home improvements or grand-children’s university fees. It can also be used where you may wish to move home and move up the property ladder to a larger property.

How does it work?

The provider lends you a percentage of the value of your home. The amount you can borrow will depend on the property value and age of the youngest borrower.  The lifetime mortgage is secured against your property and the interest is on a 'roll up' basis which means it is accrued on top of the debt, with no regular repayments. The mortgage will run for your lifetime and on the eventual sale of your property the lifetime mortgage and the compounded interest added is repaid from the sale proceeds.

Lifetime Mortgage with a Drawdown Facility

This works in a similar way to a normal Lifetime Mortgage but rather than take a large lump sum in one go this enables you to take an initial amount, and then draw down (or borrow) the additional funds available as required over a period of time. This can be a regular payment or ad hoc depending on your specific needs. The main benefit of this scheme over taking all the funds in one go is that you are only charged interest on the funds borrowed and as such less interest is paid in the earlier years or until the full facility has been used.

This is especially popular where you may have a need for a bit of money now, and then would like access to further funds as needed to supplement living costs or outgoings. It also limits the debt on the property in earlier years which is more cost effective.

Impaired Life Lifetime Mortgage

Certain schemes will pay out a larger amount if you have had medical issues in the past. It is vital that you explain any medical issues you may have had as it will enable your Equity Release Adviser to secure the best lifetime mortgage for your needs and ensure you get the maximum funds available.

Further Advance Lifetime Mortgage

As schemes are based on your age as you get older you can sometimes borrow additional funds after the initial lump sum or drawdown facility has been utilised. This will depend on the original scheme chosen, property value at that time and your personal circumstances.