Lifetime Mortgages

Lifetime Mortgages (Equity Release)

The most popular form of Equity Release, a Lifetime Mortgage, allows you to free up a tax free lump sum from your property, while retaining full legal ownership. There are generally no monthly repayments, and the money can be spent in any way you choose. You won’t need to pay back the loan until you pass away or move into long term care.

How do they work?

Equity Release plans are becoming increasingly popular due to the financial freedom they offer homeowners. While some choose to use the money to support themselves and their families throughout their retirement, others might put into action those long awaited home improvements or holidays they’ve always dreamed of taking.
Our selected advisers are regulated by the Financial Conduct Authority and plans are offered with a ‘no negative equity’ guarantee in place for your peace of mind.

Who can apply?

Depending on your lifestyle and medical history, you may qualify for an enhanced Equity Release plan, which provides you with a higher lump sum. Even moderate health conditions mean you may qualify for an enhanced plan, so it’s always worth discussing this with our selected Equity Release advisers.

Please note, releasing equity will reduce any inheritance for your loved ones and may impact any means-tested state benefits.

Different types of Mortgage 

Lifetime Mortgage
A Lifetime Mortgage is the most popular type of Equity Release plan. It allows you to release a tax free lump sum from the value of your home. There are generally no monthly repayments and the money is repaid from the sale of your home when you pass away or move into long-term care.

Drawdown Lifetime Mortgage
Similar to a standard Lifetime Mortgage, a drawdown plan allows you to access your money with a higher degree of flexibility. Rather than receiving a lump sum all at once, you can release your money over time, as and when you need it. Drawdown plans can be more cost effective as you only pay interest on the cash that you have taken so far.

Interest Only Lifetime Mortgage
Those concerned by the reduction in value of their estate might consider taking out an Interest Only Lifetime Mortgage, which allows you to make either ad-hoc or full interest repayments throughout the plan, with the remainder being paid off after your death or permanent vacation of your home.

Retirement-interest only Mortgages

Retirement-interest only mortgages (RIOs) are a relatively new set of products designed to help older borrowers who may struggle to get a standard residential mortgage. They allow you to borrow against your property and only pay back the interest (and not the loan itself) each month.  With most RIO mortgages, you only repay the loan when you sell your property, move into residential care or die. But some retirement-interest only mortgages carry terms like a regular mortgage, meaning you either pay them back after a set number of years or when you reach a certain age - 90, for example. Rather than the onerous steps you have to take to prove your income with a standard residential mortgage, you only have to prove that you can afford the interest. Some retirement interest-only mortgages allow you to repay some capital as well as interest. This will cut down the size of your loan over time, meaning that more of your property can be passed onto your loved ones.Each lender has different limits on how much you can borrow against your property. If you're borrowing on an interest-only basis, you're likely to be able to borrow less than if you get a deal where you also pay down the loan.  There will be other requirements, too, such as a minimum property value, minimum income and minimum loan size.  The amount you can borrow will be based upon an affordability assessment, looking at your income and outgoings to make sure you can keep up repayments once your only sources of income are from pensions, savings or investments, and not employment.


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