Advantages and Disadvantages of
Lifetime Mortgages

Advantages of Lifetime Mortgages

• Lifetime Mortgages of the roll up nature are available to younger people (55/60) than other schemes such as reversion schemes where it is typically 65 or 70 if joint.
  
• Unlike ordinary mortgages, Lifetime Mortgages of the roll up type have no monthly repayments to make and the amount available doesn’t depend on your income.
  
• Money is given to you to decide how to spend or invest it.
  
• You retain full ownership of the property and therefore the right to remain living in your home as long as you want.
  
• Flexible drawdown Lifetime Mortgages allow you to control how quickly the debt builds up.
  
• Unlike ordinary mortgages the amount you can borrow under a roll up type Lifetime mortgage, is determined by your house price and your age, not incomes, and there are no monthly repayments to find.
  
• Ordinary Lifetime Mortgages which require you to make monthly repayments avoids the debt from building up.

Disadvantages of Lifetime Roll Up Mortgages

• If you start it whilst young and live a long time, the loan and accumulated interest on a roll up Lifetime mortgage may represent a significant percentage of your home's value, especially if property prices do not increase. However, should you not require the maximum amount available for your age/s we can now offer a protected lifetime mortgage scheme that will guarantee that a certain minimum percentage (up to 50%) will always remain for you or your family.
  
• The loan and interest accumulated on a roll up scheme will reduce what your family inherit. This could be avoided with an ordinary Lifetime mortgage.
  
• As the interest is not repaid until you die, on a Lifetime Roll Up Mortgage the interest rate is higher than ordinary mortgages.
  
• If you take the maximum release whilst relatively young and spend all of the money released, you may not be able to borrow further money to provide for yourself later in life, unlike a partial Reversion Scheme.
  
• Ordinary lifetime mortgages, unlike the specialist roll up type, normally only offer fixed rates for a limited period of time. Specialist roll up types offer fixed rates for the life of the loan.
  
• Lifetime mortgages involve borrowing against your home and may work out more expensive in the long term than downsizing to a smaller property, and may affect your entitlement to State benefits and grants.

This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration

Please note: All equity release products involve borrowing against, or selling all or part of your home, and may work out more expensive in the long term than downsizing to a smaller property, and may affect your entitlement to State benefits and grants. There may also be more suitable methods of raising the funds you need.

Find out more about some of the alternatives to Lifetime Mortgages.