Compare lifetime mortgage providers - equity release - moneyfacts.co.uk

Equity Release - Lifetime Mortgages

  - Compare lifetime mortgage providers with our equity release selection. Alternatively speak to an adviser to explore your retirement income options.
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Compare Lifetime Mortgages

Provider APR Fixed/VariableMin ageMin property valueMin loanMax loan 
Legal & General Home Finance
Flexible Lifetime Mortgage
Flexible Lifetime Mortgage
4.0%
Fixed
60£100k£10k£4m 
Product Fee: None
LV=
Lifetime Mortgage – Lump Sum+
Lifetime Mortgage – Lump Sum+
4.6%
Fixed
60£70k£10k£500k 
Product Fee: Application £595
More 2 Life
Capital Choice
Capital Choice
4.7%
Fixed
60£70k£15k£500kGo to Site
Product Fee: Arrangement £500
Aviva
Lifetime Flexible Option
Lifetime Flexible Option
5.3%
Fixed
55£75k£15k£600kGo to Site
Product Fee: Arrangement £5
Just Retirement Money
Drawdown Lifetime Mortgage
Drawdown Lifetime Mortgage
5.7%
Fixed
60£70k£10k£600kGo to Site
Product Fee: Application £500
Hodge Lifetime
Lump Sum Lifetime Mortgage
Lump Sum Lifetime Mortgage
5.5%
Fixed
60£100k£20k£500kGo to Site
Product Fee: Application £595
This graph is owned by Moneyfacts who update it. Figures as at 18th November 2016

Notes:
Providers may have multiple entries.
Where different fees apply according to location, the fee for England and Wales is shown.

Moneyfacts.co.uk Best Buys show the best products chosen by our independent experts. Where we have been able to we have also provided a link for you to apply via Moneyfacts.co.uk today. Products shown with a yellow background are sponsored products.

 

LTV or loan to value is the maximum percentage of the value of your home that the equity release provider is willing to loan you. Although the money released to you is a loan, the amount owed (the original loan plus interest accrued) may not need to be repaid until your home is sold either when you die or move into permanent long-term care. Some plans require some or all of the interest due to be paid monthly. Equity release loan to values tend to be much lower than for conventional mortgages and will often vary according to age – the older the applicant, the higher the LTV available.

 

Equity release: lifetime mortgages explained

Lifetime mortgages are the most common type of equity release plan, and work by lending you a percentage of your home’s value. The cash you receive is tax-free and can be spent on almost anything you want. The older you are, the more you may be able to borrow.


How do lifetime mortgages work?

The loan is secured against your home but you don’t have to make any repayments like you would with a standard mortgage. Instead, the interest that is charged rolls up, gradually increasing the amount you owe throughout your lifetime. When the last person named on the lifetime mortgage and living in the property passes away or moves into permanent long-term care, the property will be sold and the lifetime mortgage repaid. Of course, with some plans, you can choose to make regular or ad hoc repayments should you wish to.

You can still leave behind a legacy to your loved ones but releasing equity will reduce the value of your estate. So, it’s best to speak with a specialist adviser, as well as anyone who stands to inherit before taking out an equity release plan.


Advantages and disadvantages of lifetime mortgages

Lifetime Mortgages
Advantages Disadvantages

  • You can get a tax-free lump-sum or a regular income.

  • Alternatively, with a drawdown lifetime mortgage you can access the tax-free cash as and when you need it. This means that you’re only charged interest on the actual amount you use (remember, you’re charged interest on the loan amount and any interest gained during that period).

  • You don’t have to make any regular repayments but if you prefer, you can choose a plan that allows you to make regular or ad hoc repayments.

  • The lifetime mortgage is repaid at the end of the plan. This is usually when the last plan holder living in the property passes away or moves permanently into long-term care.

  • You have the option to leave an inheritance (with an Inheritance Protection Guarantee).

  • You continue to own your home so if property prices increase, you benefit from it.

  • You can move house after releasing equity provided the new property meets your equity release provider’s lending criteria.

  • Younger borrowers can’t borrow as much.

  • The amount you owe increases during your lifetime as interest accumulates and is added to the loan. This reduces the value of your estate and possibly erodes any inheritance you could leave behind.

  • Equity release could affect your entitlement to means-tested state benefits.

  • If you decide to repay your lifetime mortgage early there may be an early repayment charge.

  • Depending on property prices and how long you live, you could owe as much as 100% of your home’s value to the lifetime mortgage provider.

  • The interest on a lifetime mortgage may be higher than the interest on a standard mortgage.

  • Charges for equity release advice, valuation fees and solicitors fees may apply, as well as admin fees.


What next?

Call the Moneyfacts Equity Release Advice Service provided by retirement specialist Just Retirement Solutions Limited on 01737 233462^. There’s no obligation to buy but an advice and arrangement fee of £749 is payable if you purchase a product that Just Retirement Solutions recommends.

Just Retirement Solutions has helped retirees release an average of £41,988* from their homes. Their advice is always quality checked and you’ll only be recommended a product where neither you nor your loved ones will ever owe more than the value of your home. Their expert team can answer your questions, guide you through the process and help you make the right decision for your circumstances.

As releasing equity can affect your entitlement to state benefits, everyone receives a full state benefits review. In fact, over half of the people that Just Retirement Solutions speaks to are eligible to claim benefits, and new claims can be worth up to £6,890 a year**.

*Average initial release value taken by unique Moneyfacts customer, between 2007 – July 2016.

** Based on a sample of 196 Just Retirement Solutions customers between 1/1/2015 and 31/12/2015

^ Lines are open 9am to 5pm, Monday to Friday (except bank holidays). Calls may be recorded or monitored, and may be charged.

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