Life time

Lifetime mortgages also known as Equity release pretty much do what it says on the tin – releasing equity from your home. This product is designed for clients in ‘later life’ – 55+. And the anticipation is that the loan will be repaid on the client’s death or their move permanently into long term residential care.

Within Equity Release, there are two types:

lifetime mortgage and home reversion. Home reversion represents just 1% of the market.

A lifetime mortgage enables the client to retain ownership of their home, with interest rolling up (added to the balance). This means the balance is increasing year on year, but all of our lenders provide a ‘no negative equity guarantee’ and why the LTVs are seemingly low.

The market has been regulated since 2004 and looked after by the Equity Release Council, launching in 2012. Within the comfort of the regulation, the market has grown, and the products offered have expanded.

We can now offer initial lump sums, with further funds available on drawdown. We can set our clients up on an interest serviced product, to allow them to keep the balance static. We even have products available, whereby the client can receive a monthly income for a set number of years. Clients are even able to overpay, via 4-6 ad-hoc payments, by up to 10-15% in any one year – this can be to maintain or reduce the balance. There will be no income or affordability assessment, the first assumption for repayment of the loan is the sale of the property.

A lifetime mortgage can be used to re-mortgage (pay off an existing mortgage or unencumbered) or a purchase on the client’s residential. In addition, there are lenders available for second homes and BTLs.

Main Features:

• Age 55+
• LTV (standard) up to 58%
• Home ownership retained
• Rates from as low as 2.32%
• Roll up or interest serviced
• Can make overpayments
• No income assessment or affordability
• Portable
• No negative equity guarantees
• Inheritance guarantees available
• Downsizing protection
• BTLs up to 44% LTV