There are three main types of lifetime mortgages:

Roll-up Lifetime Mortgages

A roll-up lifetime mortgage allows you to borrow money secured against your home.

You receive an agreed sum against the value of your property and interest payments are added each year to the loan.

The total amount repaid to the provider when the property is eventually sold is the initial loan amount plus any accumulated interest.

For most plans the interest rate is fixed and will not change during your lifetime.

Click here to find out more about Lifetime Rollup Mortgages

 

Drawdown Lifetime Mortgage

 

Works the same as a roll-up lifetime mortgage except you can choose to release the money flexibly, as and when you need it.

You can shoose to have money in a reserve account, ready to drawdown.

Interest will not accrue on the money held in reserve until you have released it.

Allows you to reduce the interest charge and have the safety of a cash reserve, ready to draw upon when needed.

Click here to find out more about Drawdown lifetime Mortgages

Interest Only Lifetime Mortgage

 

As with the Roll-up and Drawdown lifetime mortgages, you receive a cash lump-sum and maintain 100% home ownership.

Unlike the others, though, you can choose to pay the interest on a monthly basis.

In fact, you can choose to pay anything from £25 per month up to the full amount of interest due. Any interest you do not pay will accrue as with the Roll-up lifetime mortgage.

You can decide how long you want to pay interest for (for example, 1 year, 5 years or even up to the lifetime of the loan).

If you decide you don’t want to make monthly payments any more, you can stop and the plan will change to a regular Roll-up lifetime mortgage.

 

Click here to find out more about interest only lifetime Mortgages

Home Reversion Plans

 

A home reversion scheme involves you selling part or all of the value of your property to the equity release provider in exchange for a lump sum.

The cash lump sum that you would receive is not a representation of the full market value of the property. This is because you will continue to live in your home with no rent for the duration of your life. The provider will only receive a return on their investment after your death, or when you decide to leave, for example to move into residential care.

If you only sold part of your property to the provider, then after your death the home would be sold and the part you retained will be passed to your estate, the remainder will go to the plan provider.

Implications

– Equity release could affect your entitlement to some state benefits and may affect your tax position.

– All equity release plans will reduce the value of your estate.

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Responsible Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,490. A lifetime mortgage may affect the value of your estate and your entitlement to means-tested state benefits. Our adviser will talk you through this and the setting up costs before you make any decision to proceed.


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