Lifetime Mortgage Equity Release

Here we explain Lifetime Mortgages

What is a lifetime mortgage?

• It is a mortgage debt on your home.  

How does it work?

• This is an interest roll-up scheme.
• You release equity and interest is charged each month to the debt.
• Think of it like a credit card that you never pay back.

Do I have to make payments?

• No, interest rolls up over the years.
• Some schemes will allow you to make payments after a period if you wish to stop the amount you owe increasing.

Is my home safe?

• You have the permanent right to live in your home until the day you die or sell your home or move or go into a care home

How much equity can I release?

• You usually set an amount, usually it will be no more than 50% of the value of property.  Most people release smaller amounts than this

Who are lifetime mortgages suitable for?

• If you need flexibility to sell, move, or have more money later

Can there be negative equity?

• If you live for a long time, the debt will mount up. 
• We work on the basis that every 10 years the debt doubles. 
• Whilst this may sound drastic, do not forget that your home may go up in value
• Ask yourself how much your house was worth 10 or 20 years ago and you may feel better
• If negative equity did occurr, most schemes have a no negative equity guarantee, in short you are still safe to remain in your home

What sort of interest rates?

• Interest rates are usually similar to normal mortgage rates and usually around 1% higher
• There are both fixed and variable interest rates

Can I release more later?

• We usually recommend schemes that have the flexibility to some funds out today and release some more in the future
• There is little point releasing the whole amount and being charged interest, if you do not need it all today.

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