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Income Lifetime Mortgage
For many people the most significant asset they own is their home. They then rely on their pension as a major source of income in retirement. However, for many people, the value of their pension may not be enough to provide them with a comfortable income in retirement.
Our Income Lifetime Mortgage lets your client release some of the money tied up in their home to provide a regular monthly income over a fixed term. The amount of monthly income, interest rate and the income term are all fixed at outset.
Dual valuation approach
We’ve introduced a dual valuation approach. For new applications you're now able to select the client’s preference for a physical or desktop on Apply Online.
- What is an Income Lifetime Mortgage?
- Who is it for?
- How much can be released?
- Quoting and online services
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What is an Income Lifetime Mortgage?
An Income Lifetime Mortgage is a way of releasing money from your client's home without having to move. It’s a loan that’s secured against their home which can be used to provide an additional source of income in retirement.
With our Income Lifetime Mortgage your client can release some of the money tied up in their home to provide a regular income, over a fixed term. Your client must take an initial minimum loan of £2,500, followed by a minimum monthly income of £200 for a fixed term of 10, 15, 20 or 25 years.
The amount of monthly income and income term can't be changed once the mortgage has completed however should your client's circumstances change, they can choose to stop taking the income at any time. But, once stopped, the monthly income can't be restarted.
We charge compound interest. This means we’ll charge interest on the loan plus any interest already added. The effect of compound interest is reduced in comparison to other lifetime mortgages as funds are released in monthly amounts, rather than as a single upfront sum.
Once the fixed income term comes to an end, the monthly income will stop, but interest will continue to roll up until the lifetime mortgage is repaid. The lifetime mortgage is usually repaid from the sale of your client's home when they, or the remaining applicant (if the mortgage is in joint names) dies or moves out of their home into long term care.
Client's will have to pay an arrangement fee on all Income Lifetime Mortgages.
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Who is it for?
Our Income 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 £100,000.
- Client's who have discussed the benefits and risks of a lifetime mortgage with their family and friends and they know:
- The income amount and fixed income term can't be changed once completed.
- Inflation may reduce the value of the monthly income the client receives over time.
- There may be cheaper ways to borrow money.
- There may be an impact on any inheritance.
- 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.
How can it help?
- Our Income Lifetime Mortgage is for clients who want a monthly income, paid to them automatically each month for a fixed term. It can supplement their income so that they can do the things they enjoy, for example, more day trips out and money for treating the grandkids.
This product is not suitable for client's who:
- Have savings that they can use instead.
- Require one off large lump sum and additional drawdowns.
- Have sufficient long-term income.
- Claim state benefits that supplement their income, as these may be affected by taking an Income Lifetime Mortgage.
- Require a guaranteed income for life.
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How much can be released?
Our Income Lifetime mortgage is for clients who require an initial loan amount of at least £2,500 and a monthly income of at least £200 for a minimum of 10 years.
The amount will depend on your client's age and property value.
Income Lifetime Mortgage Product Summary PDFsize: 115KB
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.
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Quoting and online services
24/7 KFI portal
To get a quote from our KFI portal.
24/7 Apply/Request reoffers
To make a new application, amend an existing one or request a reoffer.
Key resources
Our services for you to use when selling one of our Lifetime Mortgages.
Submitting non standard properties
In these situations we'll need some more information to assess your client's application.
Register for online services
To do business with us, register here for full KFI and portal access.
Large loan request
If the total borrowing requirement is over £750,000 or the property value is over £2million, you will need to make a large loan enquiry.
Key documents
Lifetime mortgage calculator
Demonstrate how much your client may be able to borrow with our Lifetime Mortgages.
Need help?
You can contact our service teams below.
Lifetime mortgage FAQs
We've put together a list of frequently asked questions about lifetime mortgages.