Lifetime Mortgages have fixed or variable interest rates, if a variable rate is selected this will have a “cap” (upper limit) set from inception. You choose how you wish the interest accrued to be serviced either monthly payments, partial payments or none at all (roll up). These interest costs will be added to the amount you have borrowed and will be repaid at the end of your plan, your property is sold, or you choose to repay the loan. There will be certain other costs involved in setting up your plan, these will include:
As long as the product chosen is a lifetime mortgage, these come with protections in place from the Equity Release Council. One of these protections is the right to remain in your property for life or until you need to move into long term care.
Retirement mortgages however do not come with these protections. Therefore, it is imperative that clients speak to a trained advisor to avoid any potential issues.
There are several factors that will govern the amount you can borrow. This will be the value of your property, your age and your health.
Please visit our calculator to get an indicative idea of the amount available to you, then feel free to contact us to discuss this further. If you are interested.
Those clients with ill health or lifestyle issues can achieve higher loan to values than standard plans which gives you the ability to borrow more. Take a look at our calculator to see what you could potentially borrow.
Interest can be serviced for the lifetime and for as much as you wish/can afford, there are also voluntary payment lifetime mortgages available giving you the ability to make repayments if and when you want. There is also a mechanism available called inheritance protection or protected equity, whereby you stipulate from the outset how much you wish to have as a guaranteed inheritance for your estate from the value of your home.
Certain schemes allow you to move home, these portable products are very useful as you never know when your circumstances may change.
You have the ability to service any part or all of the interest payments on your lifetime mortgage. Equally you could choose to not pay any interest at all and simply allow this to “roll-up” this would be added to the amount borrowed and repaid at the end of your plan (upon death or entering long term care), your property is sold or you choose to repay the loan.
Many providers are now using fixed early redemption charges similar to conventional mortgages rather than the normal Gilt rates. Even if you choose a gilt rate linked redemption charge, Gilt rates are at an all time low so can only really increase meaning any charges will be minimal or nothing at all.
In addition to the above, there is also a downsizing guarantee available which would give you the ability to repay the loan without penalty upon moving to a new house, after a qualifying period.
Drawdown facilities are available where you are able to have a pre-agreed cash reserve available when you want it. This can provide regular fixed income over 10 – 25 years or more.
We have providers who can provide finance on these types of properties where there is an age restriction on the title (normally over 55’s).
Yes, we have lenders on panel who cater for these types of property. You can also use second homes and/or Buy to Let properties as additional collateral allowing you to increase the amount you can borrow.