How will you spend your lifetime?
Liftetime mortgages, or equity release mortgages enable you to access the equity, or cash tied-up in your home if you are over the age of 55. Money can either be taken as a lump sum, in staged smaller amounts, or as a combination of both.
A lifetime mortgage is secured on your property. The property must be your main residence and you will retain ownership of it. You can choose to ring-fence some of the property’s value as an inheritance for family members, and whether you want to make repayments or allow interest to roll- up. The amount of the loan and any accrued interest is paid back when you die, or when you move into long-term care.
Questions our customers ask include:
What is the maximum percentage I can borrow?
This is usually 60% of the value of your property. However, how much can be released does depend on your age and the value of your property and the percentage typically increases according to your age.
What interest rate?
Interest rates must be fixed, or if you are on a variable rate, there must be an upper limit which is fixed for the life of the loan.
What happens to my property?
You remain in your property for life, or until there is a move into long-term care as long as the property is your main residence and you abide by the terms and conditions of your contract.
What about repayments?
If you can make repayments then the mortgage will be less costly. However, with a lifetime mortgage where you make monthly repayments, the amount repaid might be based on your income and checks will be made to ensure that this is affordable for you.
How is the money paid?
The money is released in small amounts or as a lump sum. The advantage of having smaller amounts is that you only pay interest on what has been withdrawn. However, if you choose this method it is important to make sure if a minimum withdrawal amount applies.
Contact us to discuss your retirement plans and discover more about lifetime mortgages.