Lifetime mortgages are available to applicants aged over 55 and are designed for people wishing to borrow funds on a lifetime basis, i.e. the provider would not expect the loan to be repaid until the eventual death of the last applicant or until all applicants move into long-term care.
Lifetime mortgages are available in several variations.
They allow you to either pay the interest monthly so that the amount owed never increases, make no payments with all interest being added to the loan and the amount owed increasing year on year or even having the option to make payments each year but only if you choose to do so.
Lifetime mortgages are available to applicants with a less than perfect credit history.
Non Roll up Lifetime Mortgages
An interest only lifetime mortgage will allow you to unlock part of the equity from your home and pay the interest on this borrowing each month, so that the amount owed does not increase.
You could alternatively choose to pay part of the interest each month, with the balance being added to the loan.
Should your situation change in the future, then you would have the option to stop paying the interest and instead add all future interest to the loan (the amount owed would then increase year on year).
There are also schemes available with transparent early redemption penalties where if necessary, the lifetime mortgage could be repaid at a future date without incurring any early redemption penalties.
Lifetime Mortgages with Optional Payments and Drawdown Facilities
You may want the flexibility to be able to pay interest or even partial capital repayments in some years, whilst in other years choosing to make no payments at all.
We have schemes available where you have the option to make payments of up to 10% of the initial amount borrowed in any year without penalty (once the lifetime mortgage has been running for a minimum of 12 months).
These types of schemes also offer flexible drawdown facilities. Instead of initially borrowing the maximum amount available to you, you can take whatever figure you initially require and then drawdown addition funds as and when required in the future.
Roll Up Lifetime Mortgages
Roll-up lifetime mortgages allow you to release some of the equity from your home without having to make any monthly payments with all of your income then available to live on and enjoy life.
Interest with this type of scheme is added to the loan with the amount owed increasing year on year, although you should be aware that by doing do, you will be reducing the equity in the property and any future inheritance you may wish to leave.
You can choose between either a lump sum and/or the ability to drawdown funds as and when required.
The total amount you would pay back on the sale of the property is the amount borrowed together with all accumulated interest but you are guaranteed that you will never owe more than the value of the property when it is sold.