Lifetime Mortgages (Equity Release or Roll Up Loans)
The number of lenders operating in the Equity Release market has contracted substainially over the past 12 months as banks concentrate on their core business. However we still have access to a wide range of specialist lenders who can provide Equity Relase solutions to suit most clients.
This is a complex long term product that requires specialist qualified advice, please call us if you would like a free no obligation initial consultation to establish the options available to you.
A Lifetime Mortgage is in effect a mortgage on which you pay no interest immediately. The interest accumulates and is added to the value of the loan. At some point in the future the value of the original loan plus the accumulated interest will need to be repaid. This will normally be on death or due to the need to sell the property and move into Long Term care. A Roll Up Loan is usually portable should you wish to move home. Importantly you will continue to maintain ownership of the property.
Advantages
- Lump sum equity release can be achieved.
- You remain the owner of your house.
- Usually available at a younger age than with alternative schemes.
- No monthly repayments to be made.
- Choice of Fixed or Variable interest rates is often available.
Disadvantages
- Debt continues to roll up.
- Interest rates are normally higher than those available for regular mortgages.
- Lower amounts tend to be released in comparison with alternative schemes.
An example of the amount that can be released on a typical equity release mortgage is outlined in the following table:
This table is for illustrative purposes only. For an accurate representation of the scheme details and costs please call us for an individual Key Features Illustration.
| Lump Sum Cash Release Amounts |
| Relating to Lump Sum Only products |
| Age of youngest applicant |
Maximum % Equity Release |
Age of youngest applicant |
Maximum % Equity Release |
Age of youngest applicant |
Maximum % Equity Release |
| 60 |
20% |
70 |
30% |
80 |
40% |
| 61 |
21% |
71 |
31% |
81 |
41% |
| 62 |
22% |
72 |
32% |
82 |
42% |
| 63 |
23% |
73 |
33% |
83 |
43% |
| 64 |
24% |
74 |
34% |
84 |
44% |
| 65 |
25% |
75 |
35% |
85 |
45% |
| 66 |
26% |
76 |
36% |
86 |
46% |
| 67 |
27% |
77 |
37% |
87 |
47% |
| 68 |
28% |
78 |
38% |
88 |
48% |
| 69 |
29% |
79 |
39% |
89 |
49% |
|
|
|
|
90+ |
50% |
Lifetime Mortgage - Drawdown plans
A drawdown lifetime mortgage has the same advantages and disadvantages as a regular lifetime mortgage, as well as a few more that are unique to this kind of equity release scheme.
The main difference with a drawdown plan is that you don't request the full sum of money available to you immediately. Instead, you decide on a maximum amount of equity you want to release and 'drawdown' the cash in stages when you want to.
Advantages
- You can drawdown cash by making withdrawals as and when you need them, or you may be able to request a monthly income
- You only pay interest on the amount of equity released, so interest could accumulate more slowly than with a regular lifetime mortgage
- You are in control of your money as you can release cash when it suits you
- You retain full ownership of your home
- Drawdown plans may be available to younger people (aged 55+)
- Some drawdown plans let you guarantee an inheritance for your family
- All equity release schemes are regulated by the Financial Services Authority, including drawdown plans
Disadvantages
- Interest rates are usually higher on a drawdown plan than they are on a standard lifetime mortgage
- If you want to increase the amount of equity released beyond the original amount agreed, you would normally have to apply for a further advance, which is not guaranteed
- There are restrictions on the minimum amount you can release
- The amount you can leave as an inheritance will be reduced
- The interest applied to the drawdown mortgage can grow quickly as it is compounded
- You can't usually raise as much money through equity release with a drawdown lifetime mortgage as you could with a reversion plan, especially at younger ages
- If you repay the lifetime mortgage loan early, you may have to pay an early repayment charge
We offer independent financial advice on a range of equity release schemes including drawdown lifetime mortgages to find the best equity release solution for you. Get specialist advice on equity release by speaking to one of our independent equity release advisers.
What will you have to pay us?
Cade & Co are Independent Financial Advisers based in Northampton, We will charge a fee of £250 for arranging a conventional interest only lifetime mortgage or £495 for a lifetime equity release mortgage or home reversion plan. This fee is payable on completion of your equity release. We will also be paid commission from the company that lends you money.
If you prefer, we also offer a fee only option where you can pay a flat fee of £995 payable with appliation and we will refund to you any commission received from the lender.
Call us for equity release advice on Northampton 01604-832932.
Or Write to us at Cade & Co, 1 High Street, Harpole, Northampton, NN7 4DH, or email mail@cadeandco.co.uk
Home vists are available if you prefer in Northampton, Bedford, Kettering, Wellingborough, Milton Keynes and surrounding areas
There are other factors to consider when arranging an equity release mortgage, such as any effect it may have on your tax status, or your entitlement to means tested benefits or age allowance. Releasing equity also means your estate would receive less or nothing upon your death, depending on the type of plan taken.
This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration.