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A lifetime mortgage is a popular equity release option for homeowners aged 55 and over, including those in their 60s.
It allows you to access a portion of your property’s value without having to sell your home or move out.
This type of mortgage can provide a tax-free cash lump sum or smaller, flexible payments, depending on your needs.
Additionally, a lifetime mortgage can be used to purchase a property, provided you have enough deposit from the sale of your current home or other savings.
This can be a great option if you’re looking to downsize or move closer to family but want to avoid the stress of traditional mortgage repayments.
A lifetime mortgage is a long-term loan secured against your home, with no need to make monthly repayments unless you choose to.
Instead, the interest builds up over time, and the loan, plus the accumulated interest, is repaid when your property is sold – either after you pass away or move into long-term care.
There are two main types of lifetime mortgages:
Some lifetime mortgages also offer the option to make voluntary payments, which can help manage the interest that accumulates.
If you’re looking to buy a new home, perhaps to downsize or relocate, you can use a lifetime mortgage to help fund the purchase.
By using the proceeds from the sale of your current property as a deposit and taking out a lifetime mortgage to cover the remainder, you can move into a new home without needing to make monthly repayments.
This option can offer flexibility and peace of mind, especially in later life.
To qualify for a lifetime mortgage, you typically need to be at least 55 years old, though many borrowers are in their 60s.
Your home must be your primary residence and generally be worth at least £70,000, though requirements vary between lenders.
You’ll also need to retain ownership of your home for the duration of the loan, which means you can stay in your property for as long as you like.
While a lifetime mortgage can be an effective way to unlock funds from your home, it can reduce the value of your estate, which can impact inheritance for your loved ones.
Additionally, it may affect your eligibility for means-tested benefits, so it’s important to consider all the long-term implications before proceeding.
No Monthly Repayments – The loan is repaid when the house is sold, so there are no monthly repayments to worry about.
Retain Home Ownership – You stay in your home for as long as you wish, without needing to sell or downsize.
Flexible Access to Funds – Whether you want a large lump sum or smaller, regular payments, lifetime mortgages offer flexibility in how you access your money.
Buy a New Property – If you want to move or downsize, a lifetime mortgage can help you fund the purchase of a new home without the need for monthly repayments.
For those over 60, there are several mortgage options available beyond lifetime mortgages.
Depending on your financial circumstances, future, and whether you prefer to make regular payments, these alternatives could be worth considering.
Retirement Interest-Only (RIO) mortgages allow you to borrow against your home but only repay the interest each month.
This keeps the loan balance fixed, with the total loan repaid once your home is sold, usually when you pass away or move into long-term care.
If you still have a steady income in your 60s, some lenders may offer a standard residential mortgage.
Typically, these mortgages have shorter terms, often between 10 to 20 years. You’ll need to make regular monthly repayments, which can either be a mix of capital and interest or interest-only.
A home reversion plan involves selling part or all your property to a provider in exchange for a tax-free lump sum or regular payments.
You can continue living in your home rent-free, but you won’t retain full ownership. The provider takes their share when the house is eventually sold.
A part and part mortgage is a blend of a repayment mortgage and an interest-only mortgage.
You pay off part of the loan each month while only paying interest on the remainder.
This can help keep monthly payments lower while gradually reducing the loan balance over time.
A bridging loan is a short-term loan designed to provide immediate funds for a specific purpose, such as buying a new property before selling your current one.
Bridging loans are ideal for situations where you need quick access to funds, but they can come with higher interest rates and fees due to their temporary nature.
Choosing the right mortgage option in your 60s depends on your financial situation and what you want from your home in the long term.
Whether you want to release equity with no repayments or prefer a more traditional approach with monthly repayments, speaking to an experienced over 60s mortgage advisor can help you understand which product best suits your needs.
By considering all your options – whether it’s a lifetime mortgage, a Retirement Interest-Only mortgage, or another alternative – we can make a mortgage recommendation that fits your lifestyle and goals.
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UK Moneyman Limited is Registered in England, No. 6789312
Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
UK Moneyman Limited is Registered in England, No. 6789312
Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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