A lifetime mortgage is available to applicants aged 55+ and allows you to borrow funds on a lifetime basis i.e. you do not have to repay the loan until either the eventual death of the second of you or if both of you have moved into long term care.
Which is the best type of lifetime mortgage for you?
Interest Only Lifetime Mortgages
With this type of scheme, you can pay the interest on the mortgage monthly in the same way as you would with a normal bank or building society interest only mortgage.
The main difference being that there is no end date to the mortgage, the interest rate is fixed for life (rates currently available from 2.36%*) and even if you were to choose to stop making monthly payments at some stage, you would still be able to make optional penalty free payments in the future.
Lifetime Mortgages Paying Part of The Interest
If don't wish to, or cannot afford to pay the full interest on a lifetime mortgage, then the solution could be to pay part of the interest with the balance added to the loan.
This would mean that the amount owed would increase year on year but at a much slower rate than if you were making no payments.
Rates currently available from 2.36%* fixed for life.
Partial payments can be any amount between £25 per month and the full interest.
Lifetime Mortgages With Optional Payments
Would you like to have the flexibility of being able to make optional payments on a lifetime mortgage rather than compulsory ones?
We have schemes available where you can repay up to 10% of the amount borrowed each year without penalty, thus giving you the ability to service the interest on the mortgage or even pay back interest and some capital whilst in other years you might choose to make no payments at all.
Roll Up Lifetime Mortgages
If you would prefer not to make any payments, then you can choose to have all interest added to the loan.
This would obviously mean that the amount owed would increase year on year with the equity in the property and any future inheritance you might wish to leave reducing.
You would however still retain ownership of the property benefiting from any increase in property prices and could never owe more than the value of the property.
Some Facts About Lifetime Mortgages You May Not Be Aware Of: -
Available even if you have a poor credit history.
You can borrow funds for any purpose such as
home improvements or simply to enjoy life.
Schemes available with no early redemption
penalties after eight years.
Funds can be made available on a draw down
No proof of income required.
Borrowing available up to 55% of the property value (dependent on age).
Can be used to purchase a property or used to release equity from an existing property.
Available on age restricted properties.
If you repay a lifetime mortgage early, you should be aware that you could repay substantial early redemption penalties.
If you move home you may not be able to take the whole of the lifetime mortgage with you to a new property.
You may not be able to borrow the full amount you require as lending is based on age(s) and property value.
* A lifetime mortgage would be secured by way of a charge on your residential property, the rate of interest would be fixed for life and an example would be as follows: -
Borrowing of £100,000 with a broker fee charged of £995, APRC 3.02%. If you choose to pay the interest monthly, payments would be £251.66 per month and assuming that the mortgage runs for 15 years, total payments made would be £45,299.
To discuss your personal situation in more detail or to obtain a written illustration with no obligation, please call us on
0800 542 1719 (it's free from UK landlines)
This is a lifetime mortgage. To understand the features and risks ask for your personalised illustration.