Lifetime mortgages

A lifetime mortgage is a form of equity release scheme where a loan is secured against your property to provide you with a tax free cash lump sum or a regular income to spend as you wish, with no monthly repayments to meet.

Interest is added to the lifetime mortgage loan throughout your lifetime, accruing at a fixed or variable rate. The loan plus interest is eventually paid back when the home is sold, usually when you move into long term care, or when you and your partner die. You can typically release between 18-50% of the value of your home with a lifetime mortgage, depending on your age.

Advantages of a lifetime mortgage

• A lifetime mortgage gives you the choice of a cash lump sum or income with no monthly repayments to meet
• You retain full ownership of your home
• Lifetime mortgages are available to younger people (aged 55+)
• No negative equity guarantee
• Some lifetime mortgage plans let you guarantee an inheritance for your family
• All equity release plans are regulated by the Financial Services Authority

Disadvantages of a lifetime mortgage

• The amount you leave as an inheritance will be reduced
• The interest applied can grow quickly as it is compounded
• You can't usually raise as much money with a lifetime mortgage as you could with a reversion plan, especially at younger ages
• If you repay the lifetime mortgage early, you may have to pay an early repayment charge

Lifetime mortgages have become a highly popular form of equity release scheme over the past few years, prompting many providers to offer a variation of a lifetime mortgage called a drawdown lifetime mortgage which allows you to release equity as and when you need it, rather than taking a lump sum or regular income.

How to find the right equity release plan

There are currently over 40 equity release plans to choose from, and you can save your estate thousands of pounds if you choose the right one.

That's where we can help. Our adviser partners search the whole equity release market on your behalf and offer award winning independent financial advice about equity release that's tailor made to your individual circumstances. They can guide you through the different types of equity release plans available to find the best possible plan for your needs.

Simply complete our online enquiry form and an adviser will be in touch as soon as possible to discuss your requirements.

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