The Best Lifetime Mortgage Rates During April 2021 | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 29/04/2021

This week we published research that found the number of equity release deals available on the market is at a record high of 510. As a result those considering equity release have more options to choose from than ever before. Saying this, those considering this option should still be aware of the long-term impact it can have on finances and must speak to an independent financial adviser before taking out a plan.

To help homeowners consider equity release to evaluate the deals on the market below we have highlighted some of the most competitive rates that were available during April.

The plans highlighted 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 needs better – as such borrowers should consider speaking to an equity release broker who will be able to select the best plans for individual requirements.

How much can you borrow through equity release?

To find out how much you can potentially borrow through equity release, use this equity release calculator.

The best lifetime mortgage drawdown rates with a fee at minimum 30% LTV

Provider Plan name AER (APR) Minimum property value Max LTV (%)
at age 70
Interest payable Partial repayments* Fee
Pure Retirement Classic Lite Plus - Fee payable 3.03%
(3.1%)
£125,000 30.5% No Yes £500
Canada Life Lifestyle Gold (Flexible) 3.09%
(3.2%)
£70,000 31% No No £650
Legal & General Home Finance Flexible Orange 3.09%
(3.2%)
£100,000 30.7% No Yes £599
Legal & General Home Finance Optional Payment Orange 3.09%
(3.2%)
£100,000 30.7% Yes No £599

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

 

Pure Retirement had one of the most competitive equity release deals this month on a plan that charged a fee and required a minimum LTV of 30%. The plan, Classic Lite Plus, which offers 3.03% AER (3.1% APR) is available to those with a maximum 30.5% LTV at the age of 70. Properties must be valued at a minimum of £125,000 to successfully apply for this plan. It allows a minimum advance of £10,000 to a maximum of £1 million. Partial repayments of up to 10% per annum can be made without charge, but interest is not payable. This plan charges a fee of £500.

Also offering a highly competitive plan this month was Canada Life, with its Lifestyle Gold (Flexible) offering 3.09% AER (3.2% APR). Applicants must have a maximum 31% LTV at the age of 70 and properties must be valued at a minimum of £70,000. The plan allows a minimum advance of £10,000 to a maximum of £1 million. It does not allow partial repayments and interest is not payable. A fee of £650 is charged with this plan.

Legal & General Home Finance had two deals that offered competitive rates during April. Both its Flexible Orange and Optional Payment Orange offer 3.09% AER (3.2% APR) and are available to those with a maximum of 30.7% LTV at the age of 70. These plans are available to those with properties valued at a minimum of £100,000 and allow a minimum advance of £10,000 to a maximum of £750,000. Both plans charge a fee of £599. Flexible Orange allows partial repayments of up to 10% per annum without a charge but does not allow interest to be paid. Optional Payment Orange allows interest to be paid but partial repayments are not allowed.

The best lifetime mortgage drawdown rates without a fee at minimum 30% LTV

Provider Plan name AER (APR) Minimum property value Max LTV (%)
at age 70
Interest payable Partial repayments*
Pure Retirement Classic Lite Plus - No fee 3.08%
(3.1%)
£125,000 30.5% No Yes
More 2 Life Capital Choice Superlite Drawdown 3 3.12%
(3.2%)
£100,000 31% No Yes
Legal & General Home Finance Flexible Orange 3.13%
(3.2%)
£100,000 30.7% No Yes
Legal & General Home Finance Optional Payment Orange 3.13%
(3.2%)
£100,000 30.7% Yes No

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

 

Homeowners looking for an equity release plan at a minimum 30% LTV that does not charge a fee will find that Pure Retirement has one of the most competitive rates. It’s Classic Lite Plus plan offers 3.08% AER (3.1% APR) and is available to those with a maximum 30.5% LTV at the age of 70. To be eligible for this plan, homeowners must have properties valued at a minimum of £125,000. A minimum advance of £10,000, up to a maximum of £1 million, is allowed. Interest cannot be paid but partial repayments up to 10% per annum are permitted without a penalty charge.

Also offering a highly competitive rate during April was More 2 Life with its Capital Choice Superlite Drawdown 3 plan offering 3.12% AER (3.2% APR). This plan is available to those with a maximum 31% LTV at the age of 70 and on properties valued at a minimum of £100,000. A minimum advance of £10,000 to a maximum of £1.5 million is allowed. This plan does not allow interest payments but partial repayments up to 10% per annum is allowed without a charge.

Two plans from Legal & General Home Finance had the next lowest rate this month. Both Flexible Orange and Optional Payment Orange offer 3.13% AER (3.2% APR) and require a maximum 30.7% LTV at the age of 70. Properties must be valued at a minimum of £100,000 to be eligible for these plans. They allow a minimum advance of £10,000 to a maximum of £75,000. Interest is not payable on the Flexible Orange plan, but partial repayments of up to 10% per annum can be made without a charge. Optional Payment Orange does not allow penalty free partial repayments but interest payments can be made.

The best lifetime mortgage drawdown rates with a fee at minimum 40% LTV

Provider Plan name AER (APR) Minimum property value Max LTV (%)
at age 70
Interest payable Partial repayments* Fee
Pure Retirement Heritage Drawdown Plus Standard Package (GILT ERCs) 3.97% AER
(4.1% APR)
£70,000 40% No Yes £895
Pure Retirement Heritage Drawdown Max Standard Package (GILT ERCs) 4.02% AER
(4.2% APR)
£70,000 40.7% No Yes £895
Pure Retirement Heritage Drawdown Plus Standard Package (Fixed ERCs) 4.02% AER
(4.2% APR)
£70,000 40% No Yes £895
Legal & General Home Finance Flexible Indigo 4.04% AER
(4.1% APR)
£100,000 41.2% No Yes £599
Legal & General Home Finance Optional Payment Indigo 4.04% AER
(4.1% APR)
£100,000 41.2% Yes No £599

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

 

Pure Retirement had some of the most competitive rates on equity release plans at a minimum 40% LTV that charge a fee. Its most competitive plan, Heritage Drawdown Plus Standard Package (GILT ERCs), offers 3.97% AER (4.1% APR). It is available to those with a maximum 40% LTV at the age of 70. Properties must be valued at a minimum £70,000. A minimum advance of £10,000 to a maximum of £800,000 is allowed. Interest is not payable but partial repayments up to 10% per annum can be made without a charge. This plan charges a fee of £895.

Pure Retirement’s Heritage Drawdown Max Standard Package (GILT ERCs) offers 4.02% AER (4.2% APR) and is available at a maximum 40.7% LTV at the age of 70. To be eligible for this plan properties must be valued at a minimum of £70,000. It allows a minimum advance of £10,000 to a maximum of £800,000 and charges a fee of £895. Interest cannot be paid on this plan but partial repayments of up to 10% per annum are permitted without a charge.

Meanwhile, Pure Retirement’s Heritage Drawdown Plus Standard Package (Fixed ERCs) offers 3.95% AER (4.02%) and offers a maximum 40% LTV at the age of 70. Properties must be valued at a minimum of £70,000. A minimum advance of £10,000 to a maximum of £800,000 is allowed. This plan allows partial repayments of up to 10% per annum without a penalty charge, but interest payments are not allowed. It charges a fee of £895.

Also offering competitive rates this month was Legal & General Home Finance. Both its Flexible Indigo and Optional Payment Indigo offer 4.04% AER (4.1% APR). These plans require a maximum 41.2% LTV at the age of 70 and properties must be valued at a minimum of £100,000. Both plans allow a minimum advance of £10,000 to a maximum of £750,000. They charge a fee of £599. Partial payments of up to 10% per annum can be made on the Flexible Indigo plan without a charge, but interest cannot be paid on this plan. Alternatively, Optional Payment Indigo allows interest to be paid but partial repayments are not permitted.

The best lifetime mortgage drawdown rates without a fee at minimum 40% LTV

Provider Plan name AER (APR) Minimum property value Max LTV (%)
at age 70
Interest payable Partial repayments*
Legal & General Home Finance Flexible Indigo 4.08% AER
(4.1% APR)
£100,000 41.2% No Yes
Legal & General Home Finance Optional Payment Indigo 4.08% AER
(4.1% APR)
£100,000 41.2% Yes No
Just J3 Drawdown - Interest payment >25.01% 4.15% AER
(4.2% APR)
£70,000 41.2% Yes No
Just J3 Drawdown 4.2% AER
(4.2% APR)
£70,000 41.2% No Yes
More 2 Life Ltd. Tailored Lifetime 5 Drawdown 4.2% AER
(4.3% APR)
£70,000 41.2% No Yes

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

 

Legal & General Home Finance had the most competitive rate on plans at a minimum 40% LTV that do not charge a fee. Both its Flexible Indigo and Optional Payment Indigo offer 4.08% AER (4.1% APR) and are available to those with a maximum 41.2% LTV at the age of 70. Properties must be valued at a minimum £100,000 to be eligible for these plans. They allow a minimum advance of £10,000 to a maximum of £750,000. Flexible Indigo does not permit interest to be paid but partial repayments up to 10% per annum can be made without a charge. Optional Payment Indigo does not allow penalty free partial repayments but interest can be paid.

Just also had two plans offering highlighted competitive rates during April. Its J3 Drawdown – Interest payment >25.01% offers 4.15% AER (4.2% APR). This plan offers a maximum 41.2% LTV at the age of 70 and properties must be valued at a minimum of £70,000. It allows a minimum advance of £20,000 to a maximum of £1,000,000. Borrowers must pay over 25% of the interest payable on a monthly basis to qualify for this plan but partial repayments cannot be made.

Just’s J3 Drawdown offers 4.2% AER (4.2% APR) and requires a maximum 41.2% LTV at the age of 70. Properties must be valued at a minimum of £70,000. A minimum advance of £10,000 to a maximum of £1,000,000 is allowed. This plan does not allow interest to be paid but partial repayments up to 10% per annum are allowed without a penalty charge.

Also offering 4.2% AER (4.3% APR) this month was More 2 Life Tailored Lifetime 5 Drawdown plan. This plan requires a maximum 41.2% LTV at the age of 70 and properties must be valued at a minimum of £70,000. It allows a minimum advance of £10,000 to a maximum of £800,000. Partial repayments up to 10% per annum can be made without a charge but interest cannot be paid.

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 28 April 2021. 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.

For more information about equity release read our equity release explained guide.

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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