A lifetime mortgage can be used to buy a new home after unlocking equity. With a lifetime mortgage, you’ll retain full ownership of your home, and they are available on both freehold and leasehold properties.

A lifetime mortgage can be used for:

• To release equity either as a lump sum or in smaller chunks to supplement income.
• To purchase a new home.
• Repaying an existing mortgage.
• Anything else or it’s complicated?

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A lifetime mortgage may potentially be the best option for you. The role of a qualified later life mortgage advisor is to spend time getting to know you, any plans you have and your hopes for later life.

We will look at the alternatives that may be available to you, looking to provide the best value solution for your needs in the long term.

Alternatives products to a lifetime mortgage are:

• Traditional interest only mortgages.
• Repayment mortgages.
• Downsizing/grants etc.
• Retirement interest only (RIO) mortgages.

We always encourage family to be part of these discussions, but that is entirely up to you.

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The costs of your lifetime mortgage will vary, depending on how much equity you are looking to release, your age, the interest rates of the plan and the ways you would like to personalise your product.

Additionally, the amount you owe overall can differ, depending on the type of lifetime mortgage you have. With a drawdown lifetime mortgage, you will only pay interest on the amounts you withdraw. Conversely, with a lump sum lifetime mortgage, you will likely owe more overall on compound interest.

Similar to when you take out a standard residential mortgage, you will still have to factor in additional costs such as a surveyor’s fee, a valuation fee, and a mortgage broker fee.

With a lifetime mortgage, it’s a condition that you seek independent legal advice during the process to ensure that you understand the features. This will be in the region of £700 to £1,000.

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The benefits with a lifetime mortgage are:

• Monthly payments are not required, they’re optional.
• For purchases, you can buy a bigger home with a lifetime mortgage.
• Joint and sole names available.
• Repay an existing mortgage and/or debts into retirement.
• Afford to pay for care or home renovations.
• Bad credit options are usually accepted.
• Overpayments are allowed depending on the lender/criteria.

You can release tax free cash either as a lump or smaller chunks as and when they’re required to supplement your income.

The lifetime mortgage balance will be paid off from the sale of your property, once you have either died or have moved into long-term care.

Because we are members of the Equity Release Council, we can offer our customers the No Negative Equity Guarantee, meaning that when the property is sold (at a fair market value), your family or estate won’t be liable for any payments if your interest exceeds the sale price of your home.

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