Is a lifetime mortgage right for you?
A lifetime mortgage isn't right for everyone. Here are some pros and cons to consider.
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Pro.
Tax-free cash
You can take a lump sum in one go or a series of smaller lump sums when it suits you. You can also choose to take a monthly income if you prefer
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Pro.
Spend it how you want
You can use it for home improvements, helping children buy their first property or to top up your monthly income. It's up to you
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Pro.
Nothing to repay
Unless you choose otherwise, there's nothing to repay until you die or move permanently into long-term care
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Pro.
Flexible repayments
If you prefer, there's an option to repay some or all of the interest. You can also choose to repay part of the original loan
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Pro.
Stay in your home
You don't need to downsize and can stay in your home until you die or move permanently into long-term care
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Pro.
You can still move house
So long as the new property is acceptable to us - we don't lend against properties with thatched roofs, for example - you can still move house
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Pro.
Inheritance protection
Part of the value of your home can be passed on if you choose our Inheritance Protection option
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Pro.
No negative equity guarantee
Whatever happens you'll never repay more than the value of your home when it is sold - even if that's less than the amount owing. Subject to terms and conditions
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Con.
Reduced inheritance
Even with our Inheritance Protection option, taking a lifetime mortgage is likely to reduce how much you can leave as an inheritance
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Con.
The interest can build up quickly
If you choose not to repay anything until you die or move permanently into long-term care, the interest can rapidly build up over time
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Con.
Early Repayment Charge
If you choose to repay all or a significant part of the loan early, there may be an Early Repayment Charge
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Con.
Means tested benefits
If you're receiving certain means tested benefits, taking a lifetime mortgage could impact your entitlement to these benefits
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Con.
Higher interest rates
Usually the interest rates for a lifetime mortgage are higher than the rates charged for a traditional mortgage
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Con.
Less freedom to move house
If you have no mortgage, you can move to any type of property. With a lifetime mortgage, the new home has to be acceptable to the lender
Is equity release a good idea?
What are the disadvantages/pitfalls of equity release?
Can’t make up your mind?
If we can provide more information to help you decide whether a lifetime mortgage could be right for you, give us a call.
Monday to Sunday 8:30am - 8:00pm
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