Tax-free cash, with optional payments
Our Optional Payment Lifetime Mortgage, a type of equity release, is a loan secured on your home which allows you to borrow against the value of your home while continuing to live there. You get a tax-free cash sum, and could save interest by making monthly interest payments. You can stop interest payments at any time, but you won’t be able to restart them.
This could be one solution if you‘re approaching the end of an interest-only mortgage and need to repay it. You may need to pay an early repayment charge to your lender.
Features
- Tax-free cashSince the money you release, with a lifetime mortgage is borrowed from your equity, it remains tax-free.
- Option to make monthly paymentsYou can pay some or all of the monthly interest to reduce the overall cost of the loan, and you can stop making payments at any time.
- Release equity when you need it.There’s flexibility to borrow more in the future if you choose not to take the full amount available upfront. If you take smaller amounts later, a different interest rate may apply to each amount to take, depending on interest rates available at the time.
- Guaranteed no negative equityWe guarantee that your beneficiaries will never have to pay more than the sale value of your home. This is as long as the property is sold for the best price reasonably obtainable and you’ve met the product Terms and Conditions
Considerations
- Impact on inheritanceA lifetime mortgage will reduce any inheritance you wish to leave. There is an option to take inheritance protection to secure a proportion of the net sale proceeds of your home.
- Early Repayment ChargesAs a lifetime mortgage is designed to last a lifetime. If you decide to repay your lifetime mortgage in full, you may have to pay an Early Repayment Charge which could be substantial, so think carefully before you decide.
- Moving homeYou can move home, and the loan will be transferred as long as the new property meets our requirements.
- Means tested benefitsTaking out a lifetime mortgage may affect your entitlement to means-tested benefits or pension credit.
- Compound interestInterest is charged on the loan, plus any interest already added. So, if you don’t pay some or all of the monthly interest, the amount you owe will increase quickly over time. There may be cheaper ways to borrow money.