Lifetime mortgages

How a lifetime mortgage works

Unlike a regular mortgage, you do not need to make any monthly repayments. Instead, interest is added to the total loan and this 'rolls up' over time, known as compound interest. Specific plans allow you to pay back some or all of the interest. Many other features are available to suit your needs, such as ringfencing a percentage of your property as inheritance or releasing the money in stages. This is known as a drawdown lifetime mortgage, and you will only be charged interest on the money you have received.

The loan and any remaining interest are repaid in full when you, and your partner in the case of a joint mortgage, pass away or move into long-term care. For a couple, the plan ends when the last remaining homeowner passes away. You will continue to own your property until then and will benefit from any increase in house prices in that time.

Lifetime mortgages across the whole of the market

By having access to the whole of the market, which has increased in recent years, I have more flexibility and versatility than ever. I offer honest and impartial advice about the best lifetime mortgage for your needs. All products come with a no negative equity guarantee, which means that your beneficiaries will never owe more than the value of your property, and any outstanding fees will be written off.

Rates on lifetime mortgages are typically fixed for the life of the loan, and they move with the market. The rate you would actually be offered depends on your age, your property and the plan features you choose, so rather than publish figures that date quickly, I quote current rates in your personalised illustration. Call me and I will happily tell you where the market stands right now.

Is a lifetime mortgage the right decision?

If you are thinking about a lifetime mortgage, I will discuss the benefits to you and any drawbacks. These include interest rolling up, which means it compounds over time. There are also other charges, including lender fees and solicitors' fees. I will tell you about these costs and evaluate whether I believe a lifetime mortgage is the right choice for you. I will always put you and your best interests at the heart of my work. I am authorised by the Financial Conduct Authority and a proud member of the Equity Release Council.

What are the benefits of a lifetime mortgage?

• Tax-free cash: the money released is tax-free and can be used for whatever purpose you wish, from home improvements to everyday living costs.
• No need for monthly repayments: you do not have to repay the loan or interest until you move into long-term care or die.
• Security: you continue to own and live in your home, and there is a fixed rate of interest that will run for the term of the loan.
• No negative equity guarantee: you will never owe more than your home is worth.
• Drawdown of funds: an initial lump sum with a pre-agreed limit available for further releases, so you are only charged interest on the amount you have received.
• Purchase your forever home: not commonly known, but you can purchase a property with a lifetime mortgage.
• Flexible: many different products are on the market, with new ones released regularly, tailored to your circumstances.
• Interest servicing options: payments can be structured from £50 per month, or 25%, 50%, 75% or 100% of the monthly interest, so more equity remains in your home.
• You can move: if you wish to move home, you can do so as long as it meets your lender's terms.
• Leave an inheritance: some products allow you to ringfence some of your home as an inheritance for your beneficiaries.
• Inheritance tax: equity release can reduce the value of your estate, which can be useful in reducing an inheritance tax liability.