Lifetime Mortgage
What is a Lifetime Mortgage?
Lifetime mortgage is a financial solution that allows you to release money from the equity you have built up in your home without the need to sell or move. The equity you have is how much your property is worth on the open market, less any mortgage or debt secured against it.
The type of equity release scheme we offer is a lifetime mortgage, where a loan is secured against your home, providing a lump sum of cash that can be used as required. Many Lifetime Mortgages also allow further loans as needed through a feature called drawdown.
There are two main types of Lifetime Mortgages:
Each of these options has its merits – Let us help you understand which option best suits your needs.
Interest Only Roll-Up Scheme
With this type of scheme, you don’t need to make monthly interest payments. Instead, the interest is added to the outstanding loan balance each month. Over time, this means the amount you owe will increase as the interest compounds. While this could eventually mean owing more than the value of your home, most Lifetime Mortgages come with a No Negative Equity Guarantee. This ensures that the amount you owe will never exceed the value of your property, providing peace of mind. The loan and accumulated interest are repaid when the home is sold—either after your death or if you move permanently into long-term care.
Interest Only Lifetime Mortgages
In this option, you make monthly interest payments that cover the full amount of interest due on the loan. Most plans offer a fixed interest rate, so your payments remain stable and predictable. The amount borrowed stays the same, preserving the equity in your home. The loan is repaid when your home is sold.
Am I Eligible?
Many people use the funds released from equity to make home improvements, assist family members, repay debts, or even take a holiday or purchase a car. If you’re over 55 and a homeowner, you may be eligible, even if you currently have a mortgage secured against your property.
We will explore all options available to you, including retirement interest only mortgages and downsizing.
What are the key considerations?
A lifetime mortgage is a loan secured against your home and the property must continue to be maintained.
The mortgage loan is generally repaid upon death or if the individual moves out of the home.
The lending can have an impact on state benefits and the age allowance.
When referring to rolled up interest plans, the interest is added to the loan amount and therefore can quickly increase the amount owed.
There are restrictions on the amount of borrowings and the type of property that may be eligible.
The lending can reduce the amount of inheritance that can be left.
What Costs Are Involved?
Professional advice fees
At Invicta Mortgage Services there is no advice fee until you submit an application. Consultations are free, and any fees we charge will be agreed upon with you in advance if you decide to proceed.
Legal fees
You’ll need to appoint your own solicitor to act on your behalf.
Lifetime mortgage provider fees
Many providers offer low-cost options, and some allow you to add fees to the initial borrowing.
Why Choose Invicta Mortgage Services?
With a variety of lifetime mortgage products available, there are options to suit different needs. We will assess your specific requirements to determine if it’s the right solution for you. If it is, we’ll provide whole-of-market advice, ensuring we find the most appropriate product tailored to your circumstances.
Equity Release Council – We are a member of the Equity Release Council (ERC) which is the industry body for the equity release sector, focused on setting standards for consumers. You will find our registration here.