Benefits of Lifetime Mortgages
Lifetime Mortgages give you the opportunity to unlock the thousands of pounds tied up in your home and can help you enjoy a more comfortable and secure retirement, whether topping up pension funds or using the added income to give yourself an all round better standard of living.
How Lifetime Mortgages work
If you and your partner are aged 55 or over, and you own your own home then you could be entitled to take out a lifetime mortgage and borrow a cash lump sum from the equity within your home. The total equity you’re able to release will depend on your age and the value of your property. Lifetime mortgages are the most popular types of plans in the UK and the money you release is tax-free.
Secure a loan without monthly repayments
Lifetime mortgages are secured against your home but you don’t have to make regular repayments or pay back the mortgage during your lifetime because the amount of equity released belongs to you in the first place. The money you borrow plus any interest amassed is repaid from the proceeds of your property once it is sold when you pass away or move into long-term residential care in later life.
With Lifetime Mortgages you remain the homeowner
In light of the current economic climate lifetime mortgages are becoming more and more popular but there was a time when many elderly homeowners weren’t sure about lifetime mortgages because they were under the impression that you had to relinquish ownership of your home.
With lifetime mortgages that isn’t the case because you release a proportion of the equity in your property whilst continuing to own it 100% for the duration of your lifetime. This means that if house prices rise during your loan you’ll continue to benefit from your property’s increase in value.
Lifetime Mortgages come with a no negative equity guarantee
This means that you will never have to pay back more than the market value of your home, whatever happens to house prices. Therefore you can never pass on debt to your loved ones when you pass away. Of course, the amount you will leave as an inheritance will be hugely affected, which is why you should always talk it over with your loved ones and seek independent equity release advice before going ahead with a lifetime mortgage plan.
Although lifetime mortgages offer many benefits you need to be aware of what impact releasing equity will have on your estate over time and whether or not your entitlement to means tested benefits could be affected.
For no-obligation advice on whether equity release could help you and information on the best plans please call our 24 hour helpline and speak to one of our advisors:
Or use the comments box below to ask a question.
Equity Release may involve a Lifetime Mortgage or Home Reversion Plan. To understand the features and risks ask for a personalised illustration.
Age Partnership provides initial advice at no cost and without obligation. Only if you choose to proceed and your equity release case completes would a typical fee of 1.5% of the amount released or £795 be payable.
Important things to consider about equity release:
- Equity release could affect your current or future entitlement to means-tested benefits
- Releasing equity to spend in your lifetime can reduce the amount that is left in your estate when you pass away
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