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Optional Payment Lifetime Mortgage

Give your clients more certainty and fewer surprises with an Optional Payment Lifetime Mortgage.

What is an Optional Payment Lifetime Mortgage?

An Optional Payment Lifetime Mortgage is a type of equity release that allows your client to unlock some of the equity from their home without having to move. It's a loan secured against their home to give them a cash lump sum or smaller amounts, tax-free, that they can take as and when they need.

No affordability checks, a payment that clients can set up front, and an alternative to interest roll-ups – all with an Optional Payment Lifetime Mortgage.

We can’t stop life bringing dramas. But we can deliver dependable products that reduce the financial worry. Our monthly payments are realistic, starting from £25 to 100% of the interest. The interest rate is fixed for life and we'll never increase their monthly interest payment.

There is no risk of payment default, as they can choose to stop making monthly interest payments at any time and remain in their home. If they do stop, the interest is then added to the amount they owe each month. Your client can't restart interest payments once they’ve stopped. Only six missed payments in total are allowed in the product terms.

If they choose this product, it could help them reduce the overall cost of the lifetime mortgage.

 

Our Optional Payment Lifetime Mortgage is for:

  • Clients aged 55 or over,
  • Living in or buying their own home, with a small or no mortgage,
  • Living in England, Wales or mainland Scotland, and own a home worth a minimum of £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties.
  • Client's who have discussed the benefits and risks of a lifetime mortgage with their family and friends and they know: 
    • There may be cheaper ways to borrow money.
    • The impact on any inheritance.
    • Any unpaid interest is added to the amount they owe each month, which means the loan and outstanding interest grow quickly.
    • Repaying the loan early is likely to cause a significant early repayment charge.
    • Releasing more from the full loan amount later may cost more or less depending on the current interest rate at the time.

How can it help?

  • Could help your clients achieve their retirement ambitions. Some clients may use a lifetime mortgage for:
    • Repaying outstanding interest-only mortgages.
    • Home improvements.
    • Helping family - children and grandchildren.

Our Optional Payment Lifetime Mortgage is for clients who want to borrow at least £10,000

Optional Payment Lifetime Mortgage Product Summary PDF size: 934KB

You can use our lifetime mortgage calculator with your client to see how much they can release and show them the impact of interest and house price growth.

Use our calculator

Property eligibility

To apply for our Optional Payment Lifetime Mortgages your client needs to meet our minimum eligibility criteria. Your client must be able to answer yes to the following questions:

  • Is their property made of traditional masonry construction, in a good state of repair, free of any tenancy restrictions, and is it in England, Wales or mainland Scotland?
  • Is their home valued at minimum of £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties. 

Below is a list of some of the main reasons why the client’s application might have been declined based on their property:

  • The lease is too short yet the purpose of loan is to pay for a lease extension and this wasn't selected.
  • Their property is a bedsit.
  • Their flat is part freehold.
  • Their property has agricultural ties.
  • Age restricted properties.

For more details please see the Later Life Mortgage Suitability Criteria PDFsize: 321KB

Applicant criteria

To apply for our Optional Payment Lifetime Mortgage your client needs to meet our minimum eligibility criteria. Your client must be able to answer yes to the following questions:

  • Are they aged 55 or over?
  • Are they living in (or buying) their home and have either a small or no mortgage?
  • Do they want to borrow a minimum of £10,000?

Below is a list of some of the main reasons why your client's application might have been declined based on our applicant criteria:

  • Undischarged bankruptcy.
  • Applicant doesn't have indefinite rights to reside in the property.
  • The applicant has Charging Orders registered against them.
  • Property is held in Trust.

For more details please see the Later Life Mortgage Suitability Criteria PDFsize: 321KB

A showstopping mortgage, without the drama, Optional Payment Lifetime Mortgage

Discover our video with Chris Nown, National Account Manager and Sally Richards, Telephone Account Manager.

Throughout the video they discuss how you can get in touch, the support available to you and most importantly, raise awareness on how taking out an Optional Payment Lifetime Mortgage can support you and your clients. 

A showstopping mortgage, without the drama, Optional Payment Lifetime Mortgage

Case studies

We’ve developed a range of technical case studies to support you and your client conversations. Each designed to demonstrate the value of the OPLM and the certainty it can provide your client with over the course of the product.

 

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Kevin and Sally case study

The married couple are on a tracker mortgage determined by the Bank of England rates.

With rates on the rise, they were keen to look at an affordable fixed interest rate for life to assure when retirement comes in 6years time they’ll still be in a financial position to afford the monthly repayments.

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Peter case study

Peter, retired, aged 75 has an interest only mortgage that’s coming to an end. Without any savings or investments, he was struggling to find a way of paying back the capital on his home.

Peter spoke with his mortgage adviser who discussed the flexible monthly interest repayments available with an OPLM. 

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Megan case study

Megan, single and aged 59 needed to find a mortgage that allowed her to start repaying her loan at an affordable rate whilst working. 

OPLM, enables a flexible repayment strategy to reduce her monthly interest payments when she retires in 6 years time.

Lifetime Mortgage calculator

Our Lifetime Mortgage calculator helps financial advisers to:

  • Show your clients how much they may be able to release from their home.
  • Demonstrate examples for both taking the maximum available as an initial advance or taking a smaller initial amount where the remainder can be drawn on in the future.
  • Illustrate the effect of our inheritance protection option on the total loan amount available.
  • Explore the impact of house price inflation.
  • Highlight how the interest on their loan increases over time.
  • Create a summary of your client's choices and possible results.

The calculator results are examples only. A lifetime mortgage is a loan secured on your client’s home. It will reduce the value of your client's estate but servicing the interest can slow or stop the growth of the loan over time and may affect their entitlement to means tested state benefits.

Our email PDF service for your illustration is unavailable. 

Quoting and online services

Available Portals

Quotes for our Lifetime Mortgages products are available through the listed portals.

24/7 Apply/Request reoffers

To generate a KFI, make a new application, amend an existing one or request a reoffer.

Submitting non standard properties

In these situations we'll need some more information to assess your client's application.

Large loan request

If the total borrowing requirement is over £300,000 or the property value is over £1 million, you will need to make a large loan enquiry below.

 

Energy Saver Cashback offer

Helping your clients

We’ll provide 10% cashback on the total cost of qualifying energy efficiency home improvements, up to £1,000 on an initial advance or £200 on a drawdown.

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Need help?

You can contact our services teams to help you with your query.