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Lifetime mortgage

A lifetime mortgage allows you to release a lump sum of cash from the value of your property. There is no requirement to make regular monthly repayments as the amount that you release, plus any interest accrued, is repaid from the money made when the property is sold. This happens when you die, move into long-term care or permanently leave the property.

  • Advantages
  • Disadvantages
  • Plans are available from the age of 55.
  • The cash you release is tax free and can be spent as you wish.
  • You continue to own your home, thereby benefiting from any future increase in its value.
  • There is no requirement to make monthly repayments with a lifetime mortgage.
  • The ‘no-negative-equity’ guarantee ensures that you can never pass on debt to your estate.
  • Plans can allow you to protect a percentage of your property value so that your family could inherit a part of the property value.
  • No more monthly repayments for your mortgage as it is a condition that you pay off your mortgage with the money you release from your home.
  • The size of the mortgage will grow over time. This is because interest is added to the original loan amount and it continues to roll up as future interest is added on top of this.
  • If you want to increase the amount of equity released beyond the original amount agreed, you would normally have to apply for a further advance, which would not be guaranteed.
  • 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 will 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

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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