Best lifetime mortgage equity release rates 2022 | moneyfacts.co.uk

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Suzanne Greener

Head of Data Collection
Published: 29/06/2022
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Last updated: 29th June 2022

The cost of living squeeze is starting to bite. Those in later life who may be on fixed incomes or with limited resources can suffer more than most from the impact of inflation. Following recent increases to bank base rate, average equity release rates are increasing but the rates offered are fixed in most cases for the entire length of the contract, providing the security that any subsequent rate rises will not impact the cost of borrowing. Downsizing is one potential solution, but for homeowners who prefer to stay in their existing property equity release can provide an alternative option.

The plans listed below are not endorsed by Moneyfacts.co.uk, but have been chosen as they offer competitive rates for the scenario that we have selected. It should be noted that other plans are available that offer similar competitive rates but may offer incentives, such as cashback, that suit the borrower’s need better. Borrowers should speak to an equity release broker who will be able to select the best plans for individual requirements.  

The best lifetime mortgage drawdown rates with a fee at a minimum 30% loan-to-value

Provider Plan name AER (APR) Minimum property value Max loan-to-value (%) at age 70 Interest payable Partial repayments* Fee
Legal & General Home Finance Flexible Orange 4.81% (4.9%) £70,000 30.7 No Yes £599
Legal & General Home Finance Optional Payment Orange 4.81% (4.9%) £70,000 30.7 Yes No £599
Legal & General Home Finance Flexible Yellow 4.96% (5.0%) £70,000 32.7 No No

£599

Legal & General Home Finance Optional Payment Yellow 4.96% (5.0%) £70,000 32.7 Yes No

£599

*Partial repayments of up to 10% per annum are permitted without an early repayment charge applying.

 

Legal and General Home Finance’s Flexible Orange and Optional Payment Orange products are the most competitive plans this month for plans with a fee at a minimum 30% LTV. Both plans offer 4.81% AER (4.9% APR). These plans are available to homeowners with a maximum 30.7% LTV at the age of 70 and properties must be valued at a minimum of £70,000. The Flexible Orange plan does not allow interest to be paid but partial payments can be made, while the Optional Payment Orange plan allows interest to be paid but doesn’t allow partial repayments. Both plans charge a fee of £599.

Similarly, with the Flexible Yellow and Optional Payment Yellow, both of these plans offer 4.96% AER (5.0% APR) with a slightly higher maximum LTV of 32.7%.

 

The best lifetime mortgage drawdown rates without a fee at a minimum 30% loan-to-value

Provider Plan name AER (APR) Minimum property value Max loan-to-value (%) at age 70 Interest payable Partial repayments*
LV= Lifetime Mortgage Drawdown+ Standard 2 4.65% (4.7%) £100,000 30 No Yes
More 2 Life Capital Choice Superlite Drawdown 3 4.65% (4.7%) £100,000 31 No Yes
LV= Lifetime Mortgage Drawdown+ Standard 2-1% CB 4.66% (4.6%) £100,000 30 No Yes

*Partial repayments of up to 10% per annum are permitted without an early repayment charge applying.

 

LV= has the most competitive deals this month for plans without a fee at a minimum 30% LTV. The Lifetime Mortgage Drawdown+ Standard 2 has a rate of 4.65% AER (4.7% APR). This plan requires a minimum property value of £100,000 and a minimum advance of £10,000 is allowed.

More 2 Life has the next best plan this month. The Capital Choice Superlite Drawdown 3 offers 4.65% AER (4.7% APR) available to those with a maximum 31% LTV at the age of 70. Properties must be valued at a minimum of £100,000 and a minimum advance of £10,000 can be taken. Interest is not payable although partial repayments are allowed.

LV= has third best plan this month. The Lifetime Mortgage Drawdown+ Standard 2 - 1% CB has a rate of 4.66% (4.6% APR). This plan is available to those with a maximum of 30% LTV at the age of 70.

The best lifetime mortgage drawdown rates with a fee at a minimum 40% loan-to-value

Provider Plan name AER (APR) Minimum property value Max loan-to-value (%) at age 70 Interest payable Partial repayments* Fee
Legal & General Home Finance Flexible Indigo 5.41% (5.5%) £70,000 41.2 No Yes £599
Legal & General Home Finance Optional Payment Indigo 5.41% (5.5%) £70,000 41.2 Yes No £599
Legal & General Home Finance Flexible Violet 5.51% (5.6%) £100,000 42.9 No Yes £599

*Partial repayments of up to 10% per annum are permitted without an early repayment charge applying.

 

Homeowners looking for a lifetime mortgage plan at a minimum 40% LTV that charges a fee will find that Legal & General Home Finance’s Indigo plans had the most competitive rates in June. The top two plans are the Flexible Indigo and Optional Payment Indigo plans which offer 5.41% AER (5.5% APR) and are available to those with a maximum 41.2% LTV at age 70. The Flexible Indigo plan does not allow interest to be paid but partial payments can be made, while the Optional Payment Indigo allows interest to be paid but doesn’t allow partial repayments.

Legal & General Home Finance also has the next best option; the Flexible Violet plan offers 5.51% AER (5.6% APR). This plan is available to those with a maximum 42.9% LTV at age 70 and properties need to be valued at a minimum of £100,000. All plans charge a fee of £599.

The best lifetime mortgage drawdown rates without a fee at a minimum 40% loan-to-value

Provider Plan name AER (APR) Minimum property value Max loan-to-value (%) at age 70 Interest payable Partial repayments*

More 2 Life

Maximum Choice Drawdown 4.53% (4.6%) £120,000 41.1 No  Yes

More 2 Life

Maximum Choice Plus Drawdown 4.74% (4.8%) £120,000 42.1 No Yes

More 2 Life

Tailored Lifetime 5 Drawdown 4.83% (4.9%) £70,000 42.4 No Yes

*Partial repayments of up to 10% per annum are permitted without an early repayment charge applying.

 

More 2 Life has the three most competitive lifetime mortgage plans for a minimum 40% LTV that doesn’t charge a fee. Its Maximum Choice Drawdown plan offers 4.53% AER (4.6% APR) and is available to those with a maximum 41.1% LTV at age 70. The Maximum Choice Plus Drawdown also has a competitive rate of 4.74% AER (4.8% APR), with a maximum 42.1% LTV at age 70. Both plans need a minimum property value of £120,000.   

Finally, More 2 Life’s Tailored Lifetime 5 Drawdown plan offers 4.83% AER (4.9% APR). This plan is available to those with a maximum 42.4% LTV at age 70 and properties valued at a minimum of £70,000. Interest cannot be paid but partial repayments can be made on all plans. The same plan is also available with 2% cashback at an AER of 5.03% (5.1% APR)

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 1 July 2022. The products chosen have been selected from equity release products available to joint applicants and are based on a scenario where the youngest borrower is aged 70. The deals selected all offer drawdown, and as such there may be cheaper rates available on deals providing a lump sum only.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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