Lifetime mortgages are a type of mortgage secured on your property which can be your main residence, 2nd home or even a holiday home. The property remains 100% in your own name and you are free to live in the property for the rest of your life.
A lifetime mortgage is usually repaid upon the death of the remaining homeowner, or them moving into long term care.
At that point the property is sold and the lender repaid from the sale proceeds, with any remaining equity passing to the beneficiaries.
There are flexible options which can be included within a lifetime mortgage, these provide the facility to:
- Have a tax-free lump sum from your property
- Make no payments unless you choose to pay the interest each month
- Allow interest to accrue, then rolls up and is added to the loan. This is called compound interest
- Allows your estate to benefit from any house price increases that are over and above the amount you owe the loan provider
- You can make repayments either on an ad-hoc or regular basis via voluntary or monthly payments to control the future balance
- Protect an element of equity by including an Inheritance Protection Guarantee which safeguards a percentage of the final property value
- Take future tax-free cash withdrawals on a drawdown lifetime mortgage basis following the creation of an initial cash reserve facility
Talk to Us….
The amount that you can release depends on a range of factors, including your age and the value of your home. It is important to bear in mind that an equity release plan will reduce the value of your estate, Our Advisors will be happy to talk you through all of these considerations if you are planning to arrange a lifetime mortgage or enter into a home reversion scheme. Contact us today to learn more.
Things to think about….
Releasing equity from your home is a lifetime commitment and will also reduce the amount of inheritance you can leave, so it’s worth including your family in any decision you make.
When you call us, we’ll refer you to a equity release adviser who will explain the features of a lifetime mortgages, and the things you need to think about, such as how equity release can affect your tax position and eligibility for welfare benefits.