Lifetime Mortgages
A lifetime mortgage is a form of equity release scheme where a loan is secured against your property to provide you with a tax free cash lump sum or a regular income (income may be taxable) to spend as you wish, often with no monthly repayments to meet.
Interest may be added to the lifetime mortgage loan throughout your lifetime, accruing at a fixed or variable rate. The loan plus interest is eventually paid back when your home is sold, usually when you move into long term care, or when you and your partner die. You can typically release between 18-50% of the value of your home with a lifetime mortgage, depending on your age.
Advantages of a lifetime mortgages
- A lifetime mortgage gives you the choice of a cash lump sum or income often with no monthly repayments to meet
- You retain full ownership of your home
- Typically available from age 55
- No negative equity guarantee
Disadvantages of a lifetime mortgage
- The amount you leave as an inheritance will be reduced
- The interest applied can grow quickly as it is compounded
- If you repay the lifetime mortgage early, you may have to pay an early repayment charge
Many providers offer a variation of a lifetime mortgage called a drawdown plan which offers you the opportunity to release money as and when you need it, rather than taking a lump sum or regular income.
We can help you find out how much equity you could release with a lifetime mortgage - please contact us.
Pacific Financial Services (North West) offers independent advice to help you choose the most suitable equity release solution for your retirement. Contact us now to get the advice that you need.
Home reversion plans and lifetime mortgages are complex products. To understand the features and risks, ask for a personalised illustration.
There will be a fee for Equity Release advice. The precise amount will depend upon your circumstances, but we estimate it will be £395.00. You have the option to pay us a fee and receive any commission which we are paid by the lender/company that buys your home. If you choose this option, we estimate that the fee will be £995.00.
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