Equity Release & Lifetime Mortgages

A lifetime mortgage is a mortgage taken out on a property that does not have to be repaid until the borrower dies or needs to go into long-term care.

It also allows you to release some of the equity (or wealth) that you accumulated in your home over the years.

Essentially, it provides a way to access the value tied up in your property without having to sell it. 

These mortgages are often used by older individuals who have substantial equity in their homes due to rising house prices over the years.

This form of lending is most suitable for those over 65, however, it’s possible to do this if you are over 55. It is important to understand that these are lifetime mortgages and to understand their features and risks, you will need to have a personalised illustration.

You don’t need to own your home outright to apply for a lifetime mortgage, but owning more of it generally leads to better deals.

There are two main types of lifetime mortgages:

• Interest Roll-Up Mortgage: With this type, you receive a lump sum or regular payments. Interest accumulates over time, but you don’t make regular repayments. The full amount is paid off when the house is eventually sold. Your beneficiaries can keep what remains, or you can use it to pay for care.
• Interest-Paying Mortgage: In this case, you make regular interest repayments on your loan. The total amount owed is repaid upon your death or when you enter long-term care. Some plans also allow you to pay off the capital.

Pros of Lifetime Mortgages:

• Cash Boost: If your home’s value has increased over the years, but the money is tied up in bricks and mortar, a lifetime mortgage lets you access that wealth.
• No Repayment Pressure: You don’t need to worry about immediate repayments; the loan is settled when you move out or pass away.
• Flexible Options: You can choose between a lump sum upfront or smaller advances, and some plans offer top-up loans later.

Remember that lifetime mortgages are a specialised product, and seeking professional advice is essential to determine if it’s the right solution for your specific circumstances.

Call us for a free appointment to discuss your objectives.