Skip to main content

Lifetime Mortgages

What Is A Lifetime Mortgage?

By Lifetime Mortgages

A lifetime mortgage is the most popular plan available when you are considering equity release. Understanding what a lifetime mortgage is, is essential to make sure you choose the right plan for your exact specifications. Our advisors can always give you the information and equity plans you need.

Essex Equity Release provide unbiased advice throughout Essex and the surrounding areas. With our team, you have a dependable option for advice regarding equity plans and a lifetime mortgage.

How A Lifetime Mortgage Works

Lifetime mortgages are the most popular option for homeowners looking to release equity. A lifetime mortgage will, usually, last the course of a homeowner’s life. However, there can be exceptions. For example, if you move home and the equity plan criteria does not allow this, repayment will be required. Alternatively, the plan will end if both you and your partner move into long-term care, leaving your home vacant.

Once this happens, the lifetime mortgage will be repaid as one lump sum with the built up interest. Despite this, more and more lifetime mortgages are becoming available where monthly and voluntary repayments are available. As the payments are flexible, you have many more options to find the cheapest plan for your needs.

With all money released during an equity plan, this is tax-free, ensuring you always receive the exact money withdrawn from your home. Our lifetime mortgages also contain a No Negative Equity Guarantee, ensuring you are never left in debt after releasing equity.

Am I Eligible For Lifetime Mortgages?

Depending on the criteria of each equity plan, the amount of money you can borrow will vary, as well as whether you can choose a particular plan. Each provider will have their own rules for who can use their equity plans as well as how much can be released. To be eligible for any lifetime mortgages, you must follow some criteria, including:

  • Minimum Age of Youngest Homeowner Is 55
  • Minimum Property Value Is £70,000
  • Specific Health & Lifestyle of Homeowners

If you have a qualifying medical condition or multiple conditions, this means you could potentially borrow more money. The money you can release and the eligibility for every homeowner is specific to the lifetime mortgages equity release plan that is available. You should always gain information and specifications of multiple plans to find the right option.

Types Of Lifetime Mortgages

Whilst a lifetime mortgage is a type of equity plan, there are several types of lifetime mortgages that you can consider and choose from. As lifetime mortgages have continued to grow in popularity, a variety of different plans have been made available. This includes:

Enhanced Lifetime Mortgage – These plans are based on your health and lifestyle, allowing you to borrow more money or have a lower interest rate. Life expectancy can be used to calculate the maximum equity release, potentially finding you the best plan.

Drawdown Lifetime Mortgage – This equity plan can provide a lower interest rate, as you do not take the maximum amount from equity release. This leaves a cash reserve with the provider if you potentially need more money in the future. As you only take a part of what could be released, this gives you a lower interest rate and repayment.

Interest-Only Lifetime Mortgage – Interest-only plans will allow you to make monthly repayments. Whilst these plans are usually for life, if you would rather make a monthly payment and prevent interest rolling up, this could be the best option for you.

Voluntary Repayment Plans – Similar to an interest-only plan, voluntary repayments allow you to pay up to 15% of what you borrow each year with no early repayment charges. This means the equity can be repaid within a few years and not when your home is sold. Voluntary repayments are also called ad-hoc payments.

With a lifetime mortgage, you will always have the choice between allowing your interest to roll-up or paying your interest as the plan is in motion.

Contact Us

For more information regarding lifetime mortgages and what option is best for you, get in touch with Essex Equity Release . You will always receive a fast response from our team, organising consultation at a suitable time for you with the easiest method. Make an enquiry and call 01268 799211 or fill in our contact form today.