Lifetime Mortgages
Currently the most popular means of unlocking the cash in your home involves
taking out a lifetime mortgage.
You borrow a set amount of money against the value of your home in the form of
a mortgage. This is normally in the form of one lump sum, although there are
now plans available that will allow you to take it out as you need it, which
could be advantageous in minimising the amount of interest owed.
You can then spend the money you release as you wish (as long as any
outstanding mortgage is settled first). The best way to visualise it is to
think of it as a long-term loan, secured against the value of your property,
that is paid off when your home is sold.
You and your partner continue to live in your home and have no interest to pay
at all during your lifetime. Instead, "compound interest" is added or "rolled
up" with the loan. The whole debt is then paid off using the proceeds from the
sale of the property when the last survivor dies, or moves into a nursing home.
View the list of Lifetime Mortgages
Advantages of Lifetime Mortgages
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Typically available to those as young as 55.
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You keep ownership of your own home and could still benefit from any rises in
house prices.
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You know how much money you will receive from the scheme at the outset.
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Possibility of leaving some equity to your heirs, depending on the size and
length of your loan.
Disadvantages of Lifetime Mortgages
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Your debt will grow over time, although this can be limited by only releasing
money you need when you need it.
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The entire equity in your property may be exhausted, leaving nothing for your
family.
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If you choose to repay the loan early, early repayment charges may apply.
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Your tax position and eligibility for means tested benefits may be affected, as
might your options for moving or selling your home in the future.
This is a lifetime mortgage. To understand the features
and risks, ask for a personalised illustration.
Back to Equity Release Mortgages