Lump-sum lifetime mortgages

What is a lump sum lifetime mortgage?

Lump sum lifetime mortgages enable you to release some of the money tied up in your home in one single lump sum.  This differs from a drawdown lifetime mortgage where you release a smaller amount initially with a pre-agreed cash facility from which you release smaller amounts as and when required.  With a lump sum lifetime mortgage, some lenders are also able to consider taking any health and lifestyle conditions you may have into consideration which may result in the potential to borrow an even higher amount.

Typically, how much can you borrow?

The maximum amount you can borrow will be determined by several factors, including your age and the value of your property. However, as a guide, you could borrow between £10,000 and £I00,000,00 if you live in the UK.

Could I get this type of lifetime mortgage?

Everyone’s circumstances are different, and you should consider lifetime mortgages very carefully.  You should discuss all your options with a financial adviser. However, we can make some general statements about who is likely to qualify for a lump sum lifetime mortgage (must apply to both of you if borrowing jointly).  You must:

  • be 55 and over. 
  • own your own home or buying a new home
  • be a UK resident.

Your property must also be:  

  • in England, Scotland or Wales
  • your main residence
  • worth a minimum of £70,000
  • made of standard construction.

How is the interest calculated?

Lump-sum lifetime mortgages charge a fixed rate of interest.  You do not usually have to make any repayments until you die or move into long-term care unless you choose to do so, however, this may incur early repayment charges. 

Some products allow you to pay interest on a monthly basis, otherwise, the interest will build up on a compound basis and can mean that the total amount you end up owing could be significantly more than you originally borrowed. 

Is there anything else I should know?

Lifetime mortgages may not be right for everyone. It may affect your entitlement to state benefits and will reduce the value of your estate.

In the meantime, we do have a handy tool – just for you

If you’re interested in getting an idea of what a lifetime mortgage could provide, try our Equity Release Calculator. It only takes a couple of minutes, and you don’t have to provide personal details if you don’t want to.

Find out how much equity you could release

Many factors are taken into account by the lender, your age, health, and the value of your home. Use our Equity Release Calculator tool to see how much money you might be able to release from your property. It only takes a couple of minutes and you don’t have to provide any personal details if you don’t want to.

No personal information required, get instant results

Need more information?

The best way we can help you is to have a quick conversation to understand your situation and recommend appropriate products. Contact us today for a no-obligation discussion.