With a lifetime mortgage, you apply for a secured loan on your home that doesn't need to be repaid until you die or enter long-term care. It frees up some of the wealth you have immobilized in your home and you can still live there. A life mortgage is a capital release plan that allows you to access part of the assets you have fixed in your home. With a lifetime mortgage, you can receive a lump sum or regular cash payments, and continue to live in your home until you die or move to a residential facility.
A lifetime mortgage is a type of equity release, a loan secured against your home that allows you to free up cash tax-free without having to move. A lifetime mortgage is designed to last a lifetime, with interest accruing over time. There is no obligation to make any monthly payments, but there are options to do so if you wish. With a lifetime mortgage, you borrow money secured against the value of your home.
You receive a tax-free cash amount to spend however you want and keep your home ownership. Why would you consider releasing capital? You may want to make the most of your retirement years traveling, or you may finally want to make the home improvements you've always dreamed of. Or maybe you just want to enjoy this moment knowing that you are financially comfortable, for yourself or your family. A lifetime mortgage can help you achieve this.
The interest rates on your lifetime mortgage will depend on different factors, such as the type of plan you choose and the length of the plan. If you have a lower than average life expectancy, perhaps because of a medical condition or because you are a regular smoker, you may qualify for an improved lifetime mortgage that allows you to unlock more money from your home at better interest rates. A lifetime mortgage is a type of equity release that allows you to free up money from your home without having to move. With a lifetime mortgage, there are no monthly payments, although it is available with certain plans.
However, there are several reasons why careful reflection, as well as independent financial advice, is always required before applying for a lifetime mortgage. It is always best to check what this is before agreeing on a lifetime mortgage to avoid unpleasant surprises. Whether you want to live life to the fullest or help younger generations, retirement can sometimes seem expensive, but a lifetime mortgage could help. If your pension, or your pension savings, doesn't provide you with enough to live comfortably in retirement, a lifetime mortgage could be a practical way to supplement your income.
Lifetime mortgages are generally available to 55- or 60-year-old homeowners who have paid (or nearly paid off) their mortgages. If you've been wanting to travel the world or book a cruise around the world, a lifetime mortgage might allow you to do so. To learn more about how each of these factors may affect your lifetime mortgage application, it's best to talk to a counselor. If you want to pay off your lifetime mortgage ahead of time, perhaps because you want to sell your property or want to re-mortgage to take advantage of a cheaper offer, you will need to inform your lender.
A lifetime mortgage might be a sensible option for you, but it's important to think about all the alternatives first. Since a lifetime mortgage is a loan that allows you to unlock the equity in your home without needing to move, it's easy to see why you could appeal.