Lifetime Mortgages

These are the main types of Lifetime Mortgage currently available:

• Roll-up Mortgage - The loan you can get can be a regular income or a cash lump sum. Fixed or variable interest is added to the loan monthly or yearly, but you do not pay the interest until your home is sold. This could be when you die or go into a care home. Interest is charged on the loan and also on all the interest that has already been added and because of this the amount you owe can grow quickly especially if you take a lump sum from the outset. The other type of roll-up mortgage is known as a drawdown mortgage. This means that instead of taking the loan as a single lump sum at the start, you take in smaller amounts over time. These can be taken at regular intervals or as and when you need them. As you are taking smaller amounts over time, the total amount you owe will grow more slowly than if you take a lump sum at the start. A roll-up mortgage may give you a higher income than a Home Income Plan (See Below) as you are not paying back any interest on the loan until it's repaid
• Interest Only Mortgage - The loan you get is a cash lump sum. You pay interest on the loan each month at a fixed or variable rate. If the interest rate is variable and your pension or other source of income is fixed, you may find it more difficult to meet your repayments should interest rates rise. The amount you originally borrowed is repaid when your home is sold
• Fixed Repayment Mortgage - The loan you get is a cash lump sum. Instead of being charged interest on the loan, you agree that when your home is sold, you will pay the lender a higher sum than you borrowed. The higher sum is agreed at the outset. How much higher will depend on your age and life expectancy. The lender takes this higher sum in repayment for the mortgage when your home is sold. However when you die, the lender may charge interest on this higher sum from the date you die until the mortgage is actually repaid
• Home Income Plan - The loan you get is a cash lump sum. The lump sum is used to buy an annuity that gives you a fixed regular income, usually fixed for life. From this income you pay the interest on your loan, usually at a fixed rate, and the rst is for you to use as you wish. The amount you originally borrowed is repaid when your home is sold. The extra income you will get is usually low if you take the annuity soon after retirement, so this type of scheme is usually only suitable if you are older. The older you are when you buy the annuity, the higher the income you will get as there are fewer years over which the income will be paid
• Shared Appreciation Mortgage (SAM) - Some lifetime mortgages include a shared appreciation element. This means that you agree with the lender that they can have a share in any increase in the value of your home when it's sold in for them charging you less or no interest on the loan

To understand the features and risks, please ask for a Personalised Illustration.