Lifetime Mortgages

Unlike a standard Mortgage, you make no monthly repayments during your borrowing period, unless you choose to and, as the name suggests a Lifetime Mortgage is just that, it has no fixed term, it’s for life.

The loan is repaid from the future sale of your property. This generally happens when you die or, in the case of a couple, when the survivor dies or moves permanently into care. The interest is added to the loan and repaid when your property is sold or when a family member (beneficiary) pays off the loan with any associated interest. You can choose to make interest or ad hoc payments during the term and therefore reduce the amount of interest due at the end of term.

Yes, although this increase is generally offset by any future rise in the value of your property and the ‘no negative equity’ guarantee means you will never owe more than the value of your home.

That’s fine, however some of the money you release will first pay off your existing/outstanding mortgage and the rest is yours to decide to spend as you wish.

No, with a Home Reversion Plan you sell all or part of your property to the lender in exchange for a cash lump sum. With a Lifetime Mortgage you still retain ownership of your home and you are simply borrowing against it.

The fact that you still retain ownership of your home is a big plus for many. And, borrowing against your home in this way means you can enjoy tax-free cash without the burden of monthly repayments, unless you choose. Why leave money sat in your home when it could be providing you with the type of retirement you want!

Unlike a standard Mortgage, no monthly repayments are made during your borrowing period. And, as the name suggests a Lifetime Drawdown Mortgage is just that, there is no fixed term.

With a Drawdown Lifetime mortgage, you release smaller amounts of tax-free cash as and when you need them, rather than one big lump sum at the start.

In short, you could end up paying less interest. Interest is only charged from the date you release each amount at different stages.

The full amount you are entitled to borrow depends on your age, the value of your home and the equity available. The amount is then pre-approved for you to draw on as and when you need to.

When you have accessed all your previously agreed funds you may be able to borrow more. This all depends on the future value of your home, your age at the time and how much you already borrowed.

The loan is repaid from the future sale of your property. Generally, this happens when you die or, in the case of a couple, when the survivor dies or moves permanently into care. You do not have the burden of monthly payments and the interest is only added to the loan as you borrow each amount.

Yes, however this is generally offset by any potential future increase in the value of your property and, because you haven’t accessed all the money right from the start, the associated interest is generally lower.

That’s fine, because some of the money you release will first pay off the outstanding mortgage and the rest is yours to spend on whatever you fancy.

With a Drawdown Lifetime Mortgage, you still own your own home whilst enjoying tax-free cash to spend as you wish, all without the burden of any monthly repayments. And, by staggering the amounts you release you are only charged interest from the date of each withdrawal, so the interest added at the end is reduced and you are therefore more likely to able to extend your borrowing. Just think what you could do with all that money/equity currently sat in your home.

Quite simply, a Home Reversion Plans is not a loan or mortgages and therefore no interest is added. You’re not borrowing against your home, you’re selling all or a percentage of its value to the provider.

No, the provider guarantees you a lifetime lease so that you can live in your home, rent-free, until you die or go into long-term care (or when the longest surviving partner dies or moves permanently into care).

If you sell all of the property to release funds when the home is sold the entire value goes to the provider (100%). If, however you only sold 50% of your home when the property is sold, then only 50% of the value goes to the provider and the remaining 50% goes to your family or stated beneficiaries.

How much you receive for your share depends on the value of your home and your age. The younger you are, then the longer you are likely to be living rent-free in your property, so the amount offered by the provider will be less.

No, a Home Reversion Plan is a long-term commitment, under which you will not be able to buy back part or all of the property.

All Equity Release Council Approved Home Reversion Plans allow you to move home, providing that the new property is suitable and acceptable to the provider.

If you have not already sold you entire home (100%) then you might be able sell further shares, as and when you wish to release more money. Some providers will also guarantee to offer this option should you need it in the future.

Customers often choose the Home Reversion Plan because of the higher amount it allows them to release and the certainty they provide. There is no added interest and you can decide what percentage of your home value you leave as inheritance. Some customers want to release the maximum amount of money from their home to pay off a large mortgage or to fund a more comfortable retirement.