Key Advantages of Drawdown Lifetime Mortgages
- You have the flexibility to unlock money when you need it, rather than withdrawing one larger lump sum
- Interest is only charged on the amount that you withdraw, not on the funds left in the reserve
- Money can be drawn down quickly without any additional fees. (A telegraphic transfer fee may apply)
- Even if you withdraw smaller amounts, the withdrawals will still be tax-free
The Risks
- Any money you withdraw will be at the interest rate applicable at that time, so could be higher than the initial payment
- Some lenders limit the size of the drawdown facility based on the size of the initial loan
- Some lifetime mortgage providers have the right to withdraw access to your drawdown facility
- Once the initial reserve has been spent, you will have to complete an additional borrowing application
Safeguarding Your Future
With all lifetime mortgage plans, you will always retain 100% ownership of your home. And the ‘negative equity guarantee’ means that even if the value of your property decreases, you will never owe more than you borrowed or pass debt on to your family.
How a Drawdown Lifetime Mortgage Works
Drawdown lifetime mortgages are a popular option for people who want flexibility around how much money they withdraw, and when they withdraw it. They allow you to access the money that you need now, with the security of knowing that there will be funds available to you in the future if you need them. You have additional peace of mind of knowing that you will only pay interest on the money that you have withdrawn, rather than on the full equity release.
The amount of cash available to you will be worked out slightly differently by different lenders. Generally, it will be calculated based on the age of the youngest homeowner and the value of the property. You are likely to be offered more cash as you get older. (Do not like the wording, implies that the facility increases automatically or suggestion that further money will be available.)
The older you are the larger the total loan amount you can access.
Once the full loan amount has been agreed, you can decide how much tax-free money you would like to drawdown. The remaining cash will be held in a reserve facility with the mortgage provider until you need it. Subsequent drawdowns normally only take a few weeks to process and don’t incur any administration fees. (telegraphic transfer fee may apply).
How We Help
Being informed is one of the most important things you can do when planning for your future. It is a regulatory requirement that you take advice from a qualified equity release advisor for a lifetime mortgage. At AskEric, we have helped thousands of people find the best deal and unlock tax-free money to aid their retirement.
When you contact us, you will be assigned a specialist advisor who will give you all the information you need to decide which lifetime mortgage plan best suits your needs. Your advisor will work with you throughout the equity release journey, offering unbiased advice that is tailored to your personal circumstances.
Get Support
One of our advisors would be happy to have a friendly, no-obligation chat to answer any questions you might have.
Get started today.
Pick up the phone, calculate a quote online or request a brochure.
Online quote
Provide just a few simple bits of information, and receive an instant estimate of the amount you could unlock.
Request brochure
Access a comprehensive guide to AskERIC’s equity release process to read and consider at your leisure.