Lifetime mortgages

A lifetime mortgage allows you to borrow against your main residence while continuing to live in it. You can take the loan either as a lump sum or in monthly instalments. Then, later in life, when you move into long-term care or pass on, the loan is paid off through the sale of the property. So what are the benefits of lifetime mortgages? Most lifetime mortgages carry a fixed interest rate, although variable rate products are available, sometimes with a capped rate. Rolled-up interest is eventually payable with the capital repayment. The sum you can borrow depends on your age and your property’s value. As a guide, if you’re 65 with a £250,000 home, you could typically borrow up to £80,000. If you survive for many years, rolled-up interest could mean your debt would overtake your property’s value, but a ‘no negative equity’ guarantee is usually available and some schemes offer ‘inheritance protection’ to ensure the property’s value can’t be completely wiped out. For lifetime mortgages, you need to be over 55 or older.

Choosing the right lifetime mortgage is about more than chasing the lowest interest rate. We’ll review your circumstances and identify plans which offer the right balance of risk and reward. In particular, we’ll make sure any products we recommend take into account the needs of both you and your partner as you get older – if one of you moves into care or dies, the other may want to continue living at home. We’ll also highlight costs such as legal fees and surveys and make sure ‘no negative equity’ clauses are offered, where necessary. Most importantly, having understood your plans, we’ll suggest alternative models of lifetime mortgages, from lifetime interest only mortgages to drawdown.

As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.

A lifetime mortgage will be secured against your home.