Lifetime mortgages involve the taking out of a mortgage secured against the value of the home. There are no monthly repayments and interest is rolled up over the life of the loan and repaid upon leaving for long-term care or death, at which point the property is sold and the lender repaid. Interest can be fixed or capped. One aspect is that the loan can increase as interest is added over time to greater than the value of the property, although The Equity Release Council's member schemes offer a no-negative-equity guarantee.
This is a Lifetime mortgage. To understand the features and risks ask for a personalised illustration.
Lifetime mortgages are generally aimed at homeowners aged 55 or over and there are no monthly repayments with some schemes. Lifetime mortgages can significantly erode the remaining equity and as a result there may be no value left to pass on. Equity release schemes may work out more expensive than alternatives such as downsizing to a smaller property. Equity release can affect eligibility for state benefits and grants. For equity release we can be paid by commission, or a fee of usually £599.