Later life lending
Repay Existing mortgage or buy a new home
To fund Home Improvements
Help out loved ones
Boost disposable income
Clear outstanding debts
OR
Lifetime Mortgages – How do they work?
Lifetime mortgages are available to homeowners where the youngest applicant is aged 55 or above
You can choose to either make no monthly payments and “roll up” the debt or instead make monthly payments ensuring the debt is not increased, commonly referred to an “Interest only” lifetime mortgage
You can choose how you wish to receive the monies, either as a “Lump Sum” or as a “Drawdown facility” so you only to take the funds when you actually need them
You retain full ownership of your home, so you benefit from any rises in the property market
Money released from a lifetime mortgage is tax-free
Roll up lifetime mortgages
Once you receive either the lump sum or paid a regular amount, the interest charged is added to the loan. The amount you borrowed, including the rolled-up interest, is repaid at the end of your mortgage term or the property is sold.
No monthly payments to be made during your lifetime
Although the debt will increase over time a “No-negative equity” guarantee means you will never pass on any debt to your children once the house has been sold
Interest only lifetime mortgages
Just like other types of lifetime mortgages, an Interest only lifetime mortgage is a way to release equity from your home to spend as you wish. However unlike other types, with an Interest only lifetime mortgage, you pay off the interest each month – rather than paying it off with the loan through the sale of your home when you pass away or move into care.
You do not make any capital repayment each month – just interest payments
They have no end date and can be carried on for the rest of your life
Providing you pay all the monthly payments the debt remains the same and will not increase
Interest only lifetime mortgages preserve more equity in your property for either your own use later in life or to leave to children
You could benefit from a fixed interest rate for life, giving you security of budgeting as the amount due will not change for the rest of your life/lives
Reassuringly, should your circumstances change and the repayments do become too much, you can simply stop paying at any time without fear of losing your home. Any future interest would simply be capitalised on the debt in such circumstances
Lump Sum
This method requires you to take the monies you have requested as a one off payment, as a single “Lump Sum”
You benefit from a fixed Interest rate for life
Drawdown
This method enables you to release some of the money you have tied up in your home by providing you with an initial advance, together with an approved “cash facility” that you can draw on, as and when you need it, subject to minimum amounts
Only pay Interest on the “drawn down” funds thus greatly reducing the Interest charged over the lifetime of the plan
Only draw down the funds as and when you need it
Income
A lifetime mortgage is a way of releasing money from your home without having to move. It’s a loan that’s secured against your home which can be used to provide an additional source of income in retirement.
With an Income Lifetime Mortgage you can release some of the money tied up in your home to provide a regular income, over a fixed term
Only draw down the funds as and when you need it
Retirement mortgages
Residential Interest only – Older borrower mortgages – Retirement Interest only (RIO’s)
Retirement mortgages offer an alternative later life lending option for persons where a lifetime mortgage may not be their preferred solution. These products are ideal for people in or approaching retirement and looking for a mortgage. These loans are secured against your home and you will make a monthly payment to ensure no interest is added to the loan, therefore applicants will need to meet lender affordability on an ongoing basis to be eligible for this product.
