What if I want to fully repay my lifetime mortgage?
Our Lifetime Mortgages are designed to last for your lifetime and to be repaid when you (or, if borrowing jointly, both of you) die or move out of your home into long term care. However, we understand your circumstances may change and you may wish to repay your lifetime mortgage early, in which case an Early Repayment Charge may be payable.
Early Repayment Charges
You should think carefully before you decide to repay any of your lifetime mortgage early, as there could be a substantial Early Repayment Charge to pay. It’s important to understand when an Early Repayment Charge may apply and how much it will be.
The Early Repayment Charge is calculated to recover costs that we or our funding providers incur when setting up the lifetime mortgage. The costs include, transaction costs incurred in reinvesting the money, or due to changes in long term interest rates.
Early Repayment Charges only apply until the youngest borrower reaches age 88 or their tenth birthday following the date of the Offer of Loan, whichever occurs later.
An Early Repayment Charge is not payable if any of the following apply:
- If you repay after you (or if joint borrowers, the youngest of you) reach the age shown in your Offer of Loan.
- If the Index at the time you repay is higher than or equal to the Benchmark Rate shown in your lifetime mortgage Offer of Loan.
- On any Optional Partial Repayments you make within the permitted limits.
- If you move home and transfer your lifetime mortgage to a new property that is acceptable to us, and as a result of which you repay a part of the lifetime mortgage as required by us.
- If you repay after you (or if joint borrowers, the last surviving of you) dies or goes into long term care.
- If joint borrowers and the last surviving of you repays in the first three years after the first of you dies or moves into long term care.