Lifetime Mortgage Advice

There are two types of Lifetime Mortgages schemes and we have detailed each below:

Interest Only roll up scheme

On this scheme you do not have to make the monthly interest payments each month, the interest is added to the outstanding loan. The amount you owe increases because the interest due is being added to the outstanding balance, each month. Eventually this may mean that you owe more than the value of your home. However, most lifetime mortgages offer a no negative equity guarantee giving you the reassurance that what you repay doesn’t exceed the value of your property.

The debt and the rolled-up interest are repaid, when your home is sold after your death, or if you have moved permanently into long term care.

Interest only mortgages

On this scheme you make a monthly payment that could cover the full amount of interest due on the amount you have taken. Most schemes will offer a fixed rate of interest for this to give you the stability of known payments each month. The amount borrowed therefore does not increase or erode any equity within your home. The amount borrowed is then repaid once your home is sold.