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

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Derin Clark

Derin Clark

Online Reporter
Published: 24/08/2021

Earlier in the month, we reported that equity release deals on the market has more than doubled in just two years. Along with a sharp rise in deals, equity release providers have also increased the maximum loan-to-value (LTV) on its plans from an average 49% to 50%. Overall, this shows that despite the impact of the pandemic on the economy, the equity release market remains strong and lenders are keen to lend to homeowners looking to release built up equity in their homes.

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 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 minimum 30% LTV

 

Provider

Plan name

AER (APR)

Minimum property value

Max LTV (%) at age 70

Interest payable

Partial repayments*

Fee

Canada Life

Lifestyle Select Gold (Flexible)

2.86%
 (3.0%)

£70,000

31

No

Yes

£650

Legal & General Home Finance

Flexible Orange

2.88%
 (3.0%)

£100,000

30.7

No

Yes

£599

Legal & General Home Finance

Optional Payment Orange

2.88%
 (3.0%)

£100,000

30.7

Yes

No

£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 30% loan-to-value (LTV) that charges a fee will find that Canada Life had one of the most competitive rates this month. Its Lifestyle Select Gold (Flexible) offers 2.86% AER (3.0% APR) and is available to those with a maximum 31% LTV at the age of 70. Properties must be valued at a minimum of £70,000. A minimum advance of £10,000 can be taken. This plan allows partial repayments, but interest is not payable. It charges a fee of £650.

Legal & General Home Finance had two highly competitive lifetime mortgage plans at a minimum of 30% LTV this month. Both its Flexible Orange and Optional Payment Orange offer 2.88% AER (3.0% APR) and are available to those with a maximum 30.7% LTV at the age of 70. These plans require that properties be valued at a minimum of £100,000 and a £10,000 minimum advance can be taken. Flexible Orange allows partial repayments but interest cannot be paid, whereas Optional Payment Orange allows interest to be paid but partial repayments are not permitted. Both plans charge a £599 fee.

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

 

Provider

Plan name

AER (APR)

Minimum property value

Max LTV (%) at age 70

Interest payable

Partial repayments*

More 2 Life Ltd.

Capital Choice Superlite Drawdown 3

2.88%
 (3.0%)

£100,000

31

No

Yes

LV=

Lifetime Mortgage Drawdown+ Standard 2

2.91%
 (3.0%)

£100,000

30

No

Yes

Legal & General Home Finance

Flexible Orange

2.92%
 (3%)

£100,000

30.7

No

Yes

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

 

The most competitive lifetime mortgage for those looking for a plan at a minimum 30% LTV and which does not charge a fee is More 2 Life Ltd’s Capital Choice Superlite Drawdown 3. This plan is available to those with a 31% LTV at the age of 70 and whose property is valued at a minimum of £100,000. Borrowers can take a minimum advance of £10,000. This deal does not allow interest to be paid but partial repayments are permitted.

LV= also had a highly competitive plan at a minimum 30% LTV this month with its Lifetime Mortgage Drawdown+ Standard 2 deal offering 2.91% AER (3.0% APR). A maximum 30% LTV at the age of 70 is needed to apply for this plan and properties must be valued at a minimum of £100,000. Borrowers can take a minimum advance of £10,000. It does not allow interest to be paid, but partial repayments are allowed.

Flexible Orange from Legal & General Home Finance was also highly competitive this month, offering 2.92% AER (3.0% APR). This plan is available to those with a maximum 30.7% LTV at the age of 70. Properties must be valued at a minimum £100,000 and a minimum advance of £10,000 can be taken. Partial repayments can be made but interest is not payable on this deal.

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 - (Fixed ERCs) (age 55-75)

3.61%
 (3.7%)

£70,000

40

No

Yes

£895

Pure Retirement

Heritage Drawdown Plus Standard Package - (GILT ERCs) (age 55-75)

3.61%
 (3.7%)

£70,000

40

No

Yes

£895

Legal & General Home Finance

Flexible Indigo - £599 fee

3.63%
 (3.7%)

£100,000

41.2

No

Yes

£599

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

 

Those wanting to release equity from their home through a lifetime mortgage and who are looking for a plan that charges a fee at minimum 40% LTV will find that Pure Retirement had the most competitive rate. Its Heritage Drawdown Plus Standard Package – (Fixed ERCs) (age 55-75) and Heritage Drawdown Plus Standard Package – (GILT ERCs) (age 55-75) both offer 3.61% AER (3.7% APR). These deals are available to those with a maximum 40% LTV at the age of 70 and who have a property valued at a minimum of £70,000. Borrowers can take a minimum advance of £10,000. Interest cannot be paid on either plan but partial repayments can be made. Both plans charge a fee of £895.

Legal & General Home Finance also has a competitive plan at a minimum 40% LTV that charges a fee. Its Flexible Indigo - £599 fee offers 3.63% AER (3.7% APR), which is available to those with a maximum 41.2% LTV at the age of 70. Properties must be valued at a minimum £100,000 and borrowers can take a minimum advance of £10,000. It allows partial repayments to be made but interest is not payable. It charges a fee of £599.

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

 

Provider

Plan name

AER (APR)

Minimum property value

Max LTV (%) at age 70

Interest payable

Partial repayments*

More 2 Life Ltd.

Capital Choice Max 2 Drawdown

3.49%
 (3.6%)

£100,000

40.03%

No

Yes

More 2 Life Ltd.

Capital Choice Max 3 Drawdown

3.60%
 (3.7%)

£100,000

41%

No

Yes

Legal & General Home Finance

Flexible Indigo

3.67%
 (3.7%)

£100,000

41.2%

No

Yes

*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 does not charge a fee will find that More 2 Life Ltd has two of the most competitive plans. Its Capital Choice Max 2 Drawdown offers 3.49% AER (3.6% APR) and is available to those with a minimum 40.03% LTV at the age of 70. Properties must be valued at a minimum of £100,000 and borrowers can take a minimum advance of £10,000. This plan allows partial repayments to be made but interest is not payable.

Meanwhile, More 2 Life Ltd’s Capital Choice Max 3 Drawdown offers 3.60% AER (3.7% APR) for those with a maximum 41% LTV at the age of 70. To be eligible for this plan, properties must be valued at a minimum of £100,000. Borrowers can take a minimum advance of £10,000. Interest cannot be paid on their plan but partial repayments are allowed.

Also offering a highly competitive plan this month was Legal & General Home Finance’s Flexible Indigo. This plan offers 3.67% AER (3.7% APR) and is available to those with a maximum 41.2% LTV at the age of 70. Properties must be valued at a minimum £100,000 and borrower’s can take a minimum advance of £10,000. Partial repayments can be made but interest is not payable on this plan.

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 23 August 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.

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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