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.

Does your client have a maturing Interest Only mortgage?

It’s estimated that there are over one million homeowners in the UK who have an Interest-only mortgage, and have no way of repaying what they have borrowed at the end of their term.

Our Optional Payment Lifetime Mortgage could help them repay their outstanding mortgage debt and continue with their routine of paying their interest monthly.

Clients coming to the end of their interest-only mortgage?

We’ve drafted a Interest-only mortgage repayment letter template to save you some valuable time.

What is it?

A 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.

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

Who's it 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 or £150,000 for 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. 

How much can be released?

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

PDF file: Optional Payment Lifetime Mortgage product summary Q0056893 PDF size: 706KB  

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.

View - Lifetime mortgage calculator 

Lifetime mortgage FAQs