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Interest-only lifetime mortgage

This is like a standard lifetime mortgage. However, you can choose to make repayments in full or on an ad-hoc basis to reduce the effect on the value of your estate. Some plans allow you to make repayments that are equal to or less than the amount of interest that is charged. The balance is paid off from the value of your estate once you have died or have moved into long-term care.

  • Advantages
  • Disadvantages
  • Plans are available from the age of 55.
  • The cash you release is tax free and can be spent on whatever you like.
  • You continue to own 100% of your home, thereby benefiting fully from any future increase in its value.
  • By paying the interest each month you limit the impact of releasing equity on the size of your estate.
  • With some interest-only lifetime mortgages, you can release considerably more than would be available from a standard lifetime mortgage.
  • Plans can allow you to protect an inheritance for your family.
  • All plans are regulated by the Financial Conduct Authority.
  • With some type of interest-only, your home may be repossessed if you do not keep up repayments on your mortgage.
  • Your tax position and eligibility of means-tested benefits may be affected now and in the future, as might your options for moving or selling your home in the future.
  • The amount that you will leave as an inheritance is likely to be reduced.
  • If you wish to pay off the equity release plan early, you may have to pay an early repayment charge these differ from plan to plan.
  • Some interest only plans will be subject to affordability checks.

Your home may be repossessed if you do not keep up with repayments on your mortgage.

Other alternatives to equity release

An equity release plan is not the only option if you wish to free up some cash in retirement. Downsizing the property, or borrowing money from a close friend or family member, could be a preferable alternative to releasing equity from the home.

Please call us today for a no-obligation chat on  Freephone 08080 555 222.  Our friendly advisors are ready to answer any questions you may have.

Equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. To understand the features and risks, ask for a personalised illustration.

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Things to consider

As multi-award-winning equity release specialists we provide impartial advice covering your options as well as explaining what impact a plan could have on the size of your estate and if your entitlement to current and future means-tested benefits could be affected now or in the future.

We provide initial advice for free and without obligation. Only if you choose to proceed and your case completes would a typical fee of 2.2% of the amount released be payable.

Equity release requires paying off any outstanding mortgage. Equity released, plus accrued interest to be repaid upon death, or moving into long-term care.