Overview
A lifetime mortgage is the most common type of equity release. It is a loan secured against your home. You still own your property, and the loan is usually repaid when the last homeowner passes away or moves into long term care.
How it works
With a lifetime mortgage, you borrow money against your home. Interest is added over time. Some plans let you pay some or all of the interest each month, which can help control the balance.
Lump sum or drawdown
You can often take the money as a lump sum, or use drawdown. Drawdown means you take an initial amount and keep a reserve for later. This can reduce interest build up because you only pay interest on what you have taken.
Voluntary repayments
Many plans allow voluntary repayments each year, usually up to a set limit. This can reduce the amount owed and help protect what you leave behind.
Moving home
Some plans are portable, which means you may be able to move home and keep the plan. The new property must meet the lender’s criteria.
Things to consider
A lifetime mortgage can reduce the value of your estate and may affect means tested benefits. There can also be early repayment charges if you repay the loan early. You can read more on our costs and risks page.
If you are just getting started, you may want to read what is equity release, check am I eligible, and see the application process. You can also use our calculator for an estimate.
If you would like clear advice on lifetime mortgages and whether equity release suits your plans, contact us today with no obligation.