Unlock some of the equity in your home.

The Lifetime Mortgage is a special kind of loan for homeowners aged 55 and over. Although it’s secured on your property, there are no monthly payments to make and it is designed to help you remain in your home for as long as you wish.

A Lifetime Mortgage allows you to benefit from the financial investment you’ve made in your house with absolutely no worries of having to give it up.

Interest will be added to your loan and the full amount is paid back when your home is eventually sold following your death (or the death of the second borrower if it is a joint application) or if you move into long-term care or sheltered accommodation.

How they work: Lifetime mortgages

A lifetime mortgage gives you a cash lump sum now, or regular income for the rest of your life. You take out a loan secured against your property. Interest is charged on this loan, but it 'rolls up' - that means it is accumulated over time, and is not repaid until the house is sold when you die or move into long-term care.
The amount you can borrow depends on your age, and the value of your property. A lifetime mortgage is a long-term commitment, and if you change your mind you will have to pay an early repayment charge, which could run to thousands of pounds. So it is important that you know exactly what you're doing before you sign on the dotted line.
And bear in mind that, if you receive means-tested benefits, for example, the cash injection you get from a lifetime mortgage could render you ineligible.
As a result, most lifetime mortgage providers recommend that you take legal advice before proceeding, and also that you seek independent financial advice. Also using equity release will have a major impact on your estate, so it can make sense to discuss the matter with your family before going ahead.

How Much Can You Borrow with a Lifetime Mortgage?

• The amount offered by different Equity Release providers varies depending on your age (or youngest age if joint) and the amount of interest charged
• Typically schemes offer between 15% - 35% of the value of the home at age 55 or under going as high as 50%-60% if the person is over 70-75
• Built into most schemes is the potential ability to receive further payment as you get older.

Lifetime mortgages — A loan secured against the property, which accrues interest until the loan plus interest is repaid when the property is sold. This is usually on entry into long-term care or when the last remaining owner passes away. Schemes are available to homeowners between 55 - 95, Clients can typically release 11-55% of the value of their home, depending on age, health and lifestyle.

Drawdown plans — A drawdown lifetime mortgage has the same advantages and disadvantages as a regular lifetime mortgage. The main difference with a drawdown plan is that the full sum of money available to the client is not released immediately. Instead, they can decide on a maximum amount of equity they want to release and ‘drawdown’ the remaining cash in stages, as and when they want to.

Releasing equity from your home is a lifetime commitment, with the loan only expected to be repaid when the home is sold, usually when you pass away or move into long term care. If you do decide to pay the loan back early, early repayment charges may apply.

Professional Mortgage Services does not advise on lifetime mortgages and  equity release for the over 55's but has partnership arrangements with specialist equity release brokers and if you require further assistance will be happy to introduce you to our equity release associates.

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