Lifetime mortgages are a long-term loan secured by your property. It’s only paid back when you decide to sell your property or when you die, or go into long-term care. There are three main types of mortgage to consider –
|No interest on sum held in the reserve account.||Can change to a roll-up mortgage plan if required||When you die interest & loan paid from estate|
|No monthly payments||Payments Monthly||No monthly payments|
|Lump sum of tax free money||Lump sum of tax free money||Lump sum of tax free money|
Points to consider
- If you make the decision to pay back the loan, early repayment fees may be charged
- A lifetime mortgage will reduce the equity in your home and can impact your right to claim state benefits
- You can’t guarantee how much of the value will be left to your family, but you can guarantee them a percentage of the property value to leave as an inheritance.
- The provider who you take the mortgage out with has the first rights on your property – if the property is ever sold, the combined loan and interest will be paid to the provider, and the rest will go to you or your beneficiaries.
- If you decide at a later date that you need to release more funds you’ll have to apply again.