A lifetime mortgage is a popular type of equity release. It's a long-term loan which is secured on your property. The amount you can borrow depends on your age and the value of your property. You won't have to make any repayments before the end of the plan. Instead, each year we'll add interest onto the loan and any previous interest. The loan and the interest are repaid in full, usually from the sale of your property, when you die or have to go into long-term care, subject to our terms and conditions.
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.
We offer the following lifetime mortgages
Lifestyle Lump Sum Max
- You release a one-off amount of money at the start of the plan.
- The overall cost is higher than our Lifestyle Flexible Option because the plan can give you a larger cash sum.
Lifestyle Flexible Option
- You take a lower initial loan and have access to a reserve of money in the future, as and when you need it.
- The overall cost can be lower than the Lifestyle Lump Sum Max option as you only pay interest on the amount released.
Features and benefits
|Feature / benefit||Lifestyle lump sum max||Lifestyle flexible option|
|Minimum loan size||£15,000||£15,000|
|Receive a tax-free lump sum|
|You own your home|
|No monthly repayments to make. Instead, each year we'll add interest onto the loan and any previous interest.|
|The loan and interest are repaid when your property is sold. This is normally when you die or move into long term care|
|Option to make partial repayments (the maximum you can repay each year is 10% of the amount borrowed)|
|Move and take the plan with you (as long as your new property meets our lending criteria at the time|
|No negative equity guarantee means you’ll never have to repay more than the money you receive from the sale of your property|
|Drawdown the cash in smaller amounts as and when you need it|
|Option to safeguard a percentage of your home's value to leave an inheritance for your loved ones|
No negative equity
We offer a ‘no negative equity guarantee’, so you don’t have to worry about leaving debts to your loved ones. You’ll never have to repay more than the money received from the sale of your property, provided it is sold for the best price reasonably obtainable.
A lifetime mortgage will always reduce the amount of inheritance you can leave. But, we know how important is is for you to have the option to leave something for your loved ones, so we offer an inheritance protection guarantee that lets you safeguard a percentage of your homes value. Please bear in mind that this will reduce the amount you are able to borrow.
Voluntary partial repayments
For customers who applied for a lifetime mortgage on or after 28th April 2014, after the first year of your lifetime mortgage, you'll also have the option to make partial repayments if you wish. Each year you can repay up to 10% of the total amount borrowed, in up to four instalments . The minimum amount you can repay in each instalment is £500.
Things to think about
Releasing equity from your home is a lifetime commitment, so it's worth including your family in any decision you make.
When you call us, we can refer you to a carefully selected equity release adviser who will explain the features and risks of our lifetime mortgages, such as:
- A lifetime mortgage charges interest on the total amount of the loan including the interest that has already accumulated, so the amount owed will quickly increase.
- Taking a cash lump sum and the costs involved will reduce the value you have in your home and the amount of inheritance you are able to leave.
- Although the amount of inheritance you can leave will always be reduced by equity release you can choose our inheritance guarantee to ensure you can leave something for your loved ones.
- However, this will reduce the amount of money you can borrow and may affect the interest rate applied. Find out more about our lifetime mortgage inheritance guarantee.
- If you have an existing mortgage on your home, you would have to use the money you release to pay off the existing mortgage first, but then you would be free to spend it as you wish.
- You don't have to pay tax on the amount you borrow, but it may affect your tax position and entitlement to means tested benefits.
- A lifetime mortgage is a long term commitment – it can be expensive if you decide to repay the loan early and you may have to pay a substantial early repayment charge.
- Please note that lifetime mortgages are not suitable for the following property types; freehold flat or maisonette (except in Scotland), studio or basement flat, flat or maisonette in a local authority or housing authority block of more than four storeys, mobile home or houseboat, farm or small holding being used for agriculture, hotel, retirement property, guest house or B&B.
- Minimum age and property values apply.
Why not call us FREE on 0800 404 6220 to find out more?