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Optional Payment Lifetime Mortgage
Our Optional Payment Lifetime Mortgage is different to our Flexible Lifetime Mortgage because it allows your client to pay some, or all, of the monthly interest by Direct Debit.
There’s no affordability assessment and your client can stop making monthly interest payments at any time. Paying the interest will reduce the overall cost of the loan.
Dual valuation approach
We have a dual valuation approach PDFsize: 245KB. For new applications you're now able to select the client’s preference for a physical or desktop on Apply Online.
- What is an Optional Payment Lifetime Mortgage?
- Who is it for?
- How much can be released?
- Quoting and online services
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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.
Our Optional Payment Lifetime Mortgage allows your client to pay some, or all of the monthly interest by Direct Debit. They can choose a payment amount between £25 and the full monthly interest charged each month.
The interest rate is fixed for life and we'll never increase their monthly interest payment.
They can choose a payment term from one year to the full duration of their lifetime mortgage.
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 total are allowed in the product terms.
If they choose this product, it could help them reduce the overall cost of the lifetime mortgage.
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Who is it for?
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 and garden improvements.
- Helping family - children and grandchildren.
- Enjoying retirement.
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How much can be released?
Our Optional Payment Lifetime Mortgage is for clients who want to borrow at least £10,000
Optional Payment Lifetime Mortgage Product Summary PDF size: 117KB
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 our Later Life Mortgage Portal.
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.