An introduction to different types of lifetime mortgage
Lump Sum Lifetime Mortgage
Unlock all the money that you want in one go. A lifetime mortgage usually has a fixed interest rate, so as soon as you receive your lump sum, interest starts to accrue on the full amount you’ve borrowed.
Drawdown Lifetime Mortgages
These plans work much in the same way as a lump sum mortgage. The key difference is that you are able to take out further funds when you want, up to a specified number of years, or until the cash reserve runs out. Interest is only charged on the total amount you withdraw, potentially saving you a significant amount compared to a lump sum plan.
Enhanced Lifetime Mortgage
If you or your partner have any qualifying health conditions, or make certain lifestyle choices, you may be able to release more money from your home.
Interest-Payment Lifetime Mortgage
Interest-payment lifetime mortgages work in much the same way as a lifetime mortgage. However, you are able to make regular payments on the interest that accrues over the lifetime of the loan.
Protected Lifetime Mortgage
With some lifetime mortgages, it is possible to guarantee an inheritance for your loved ones. Choose a fixed amount, or a percentage of the value of your home, to be left to your beneficiaries when your plan comes to an end. This amount will be guaranteed.
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Access a comprehensive guide to AskERIC’s equity release process to read and consider at your leisure.