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Lifetime Mortgage
A Lifetime Mortgage is similar to a standard mortgage i.e. a loan which is secured against your property’s value. You are using the value of your home as security for borrowing money. The loan is repaid out of the future sale of the property, generally when you die or if you are a couple when the survivor of you both dies or the survivor of you goes into long term care.
The main difference with a lifetime mortgage is during your borrowing period you make no monthly repayments. The main benefit to this is you can have a large sum of money and you will not have to make large monthly repayments out of your retirement income.
The interest is added to the loan and is repaid at the end. Lifetime Mortgages have no set term, as they are as the name suggests, a mortgage for life.
Over time the loan will increase in value, however, this can generally be offset by future increases in your property’s value. In most cases the value you purchased your home for compared to the current value means your property has increased in value over time. Speaking to a Specialised Advisor will help you understand how your property has increased on a percentage basis each year.
The Equity you can release from your property is Tax Free and can be used for anything you wish.
For example:
Those holidays of a lifetime you deserve, replace the car to last through retirement.
Help your children by gifting them some money, take pleasure from watching them enjoy it.
A conservatory to while away those retirement years in comfort.
Home improvements or repairs which will add value to your property.
Repay your mortgage to free up some retirement income.
Pay off loans and credit cards allowing more financial freedom.
Private medical bills for a health concern.
The above list will give you some ideas. However this list does not cover everything. Remember it is your money and you are free to spend it as you wish.
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