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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 a regular 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 and the interest accrued is paid off from the value of your estate once you have died or have moved into long-term care.

  • Advantages
  • Disadvantages
  • The cash you release is tax free and can be spent achieving your goals.
  • You continue to own your home, thereby benefiting fully from any future increase in its value.
  • By paying the interest each month you reduce the impact of releasing equity on the size of your estate.
  • With some types of interest-only lifetime mortgages, you can release considerably more than would be available from a standard lifetime mortgage.
  • Plans can allow you to protect a percentage of your property value so that your family could inherit a part of the property value.
  • 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 as the initial amount is still outstanding.
  • 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.
  • Most interest only plans will be subject to affordability checks.
  • If you miss any repayments, your plan will convert into a standard lifetime mortgage subject to lenders terms and conditions.

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.

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

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Things to consider

As multi-award-winning equity release specialists we provide informative advice covering your options as well as explaining how equity release will affect potential inheritance and how your entitlement to 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 £1,795 be payable.

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