The best Lifetime Mortgage Rates December 2021 | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 16/12/2021

The equity release sector has remained strong this year with the first nine months of 2021 seeing homeowners take out £2.989 billion via equity release. As well as this, last month, equity release was on track to break through the £4 billion mark this year.

As well as this , lifetime mortgages have been growing in popularity this year, with the Equity Release Council promoting using property wealth to top-up pensions and to provide a living inheritance to children and grandchildren.

To help homeowners decide whether a lifetime mortgage is right for them, below we’ve highlighted some of the most competitive rates available this month.

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 3.00%
(3.1%)
£70,000 31 No Yes £650
Legal & General Home Finance Flexible Orange 3.05%
(3.1%)
£70,000 30.7 No Yes £599
Legal & General Home Finance Optional Payment Orange 3.05%
(3.1%)
£70,000 30.7 Yes No £599

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

 

During December one of the most competitive lifetime mortgage plans at a 30% LTV that charges a fee comes from Canada Life. Its Lifestyle Select Gold plan offers 3.00% AER (3.1% APR) and requires homeowners to have a maximum 31% LTV at the age of 70. Homes must be valued at a minimum of £70,000 and borrowers can take a minimum advance of £10,000. Interest is not repayable on this plan, but partial capital repayments can be made. It charges a fee of £650.

Legal & General Home Finance had two highly competitive plans this month. Its Flexible Orange and Optional Payment Orange plans offer 3.05% AER (3.1% APR). These plans require a maximum 30.7% LTV at the age of 70 and properties much be valued at a minimum of £70,000. A minimum advance of £10,000 can be taken. Interest can be paid on the Optional Payment Orange plan, but not on Flexible Orange. Partial repayments can, however, be made on Flexible Orange but not on Optional Payment Orange. 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 Capital Choice Superlite Drawdown 3 3.04%
(3.1%)
£100,000 31 No Yes
LV= Lifetime Mortgage Drawdown+ Standard 2 3.06%
(3.1%)
£100,000 30 No Yes
LV= Lifetime Mortgage Drawdown+ Standard 2 - 1% Cashback 3.07%
(3.1%)
£100,000 30 No Yes

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

 

This month, More 2 Life has a highly competitive lifetime mortgage plan at a minimum 30% LTV that does not charge a fee. Its Capital Choice Superlite Drawdown 3 plan offers 3.04% AER (3.1% APR) and is 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. Early interest is not repayable but partial capital repayments can be made.

Also offering competitive lifetime mortgage plans this month is LV=. Its Lifetime Mortgage Drawdown+ Standard 2 plan offers 3.06% AER (3.1% APR) and its Lifetime Mortgage Drawdown+ Standard 2 – 1% Cashback offers 3.07% AER (3.1% APR). Both plans are available to those with a maximum 30% LTV at the age of 70 and require properties to be valued at a minimum of £100,000. These plans allow a minimum advance of £10,000. Interest cannot be repaid but partial capital repayments are allowed.

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

Provider Plan name AER (APR) Minimum property value Max LTV (%) at age 70 Interest payable Partial repayments* Fee
Legal & General Home Finance Flexible Indigo 3.71%
(3.8%)
£70,000 41.2 No Yes £599
Legal & General Home Finance Optional Payment Indigo 3.71%
(3.8%)
£70,000 41.2 Yes No £599
Pure Retirement Heritage Drawdown Plus Standard Package - (age 55-75) 3.86%
(4%)
£70,000 40 No Yes £895

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

 

Legal & General Home Finance has two highly competitive lifetime mortgage plans at a minimum 40% LTV that charge a fee. Both its Flexible Indigo and Optional Payment Indigo plans offer 3.71% AER (3.8% APR). These plans are available to those with a maximum 41.2% LTV at the age of 70 and properties need to be valued at a minimum of £70,000. Both plans allow a minimum advance of £10,000. Interest cannot be paid on the Flexible Indigo plan but can be paid on Optional Payment Indigo. Partial repayments are allowed with Flexible Indigo but not on the Optional Payment Indigo plan. The plans charge a £599 fee.

Another highly competitive plan this month comes from Pure Retirement with its Heritage Drawdown Plus Standard Package – (age 55-75) plan offering 3.86% AER (4% APR). This plan is available to those with a maximum 40% LTV at the age of 70. Properties must be valued at a minimum of £70,000. Borrowers can take a minimum advance of £10,000. This plan allows partial capital repayments. It charges a fee of £895.

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 Capital Choice Max 2 Drawdown 3.6%
(3.7%)
£100,000 40.03 No Yes
Legal & General Home Finance Flexible Indigo 3.75%
(3.8%)
£70,000 41.2 No Yes
Legal & General Home Finance Optional Payment Indigo 3.75%
(3.8%)
£70,000 41.2 Yes No

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

 

One of the most competitive plans at a minimum 40% LTV that does not charge a fee this month comes from More 2 Life. Its Capital Choice Max 2 Drawdown plan offers 3.6% AER (3.7% APR) and is available to those with a maximum 40.03% LTV at the age of 70. Properties must be valued at a minimum of £100,000. A minimum advance of £10,000 can be taken. This plan does not allow interest to be repaid but partial capital repayments can be made.

Legal & General Home Finance also has highly competitive plans this month. Both its Flexible Indigo and Optional Payment Indigo plans offer 3.75% AER (3.8% APR) and are available to homeowners with a maximum 41.2% LTV at the age of 70. To be eligible for these plans, properties must be valued at a minimum of £70,000. Flexible Indigo does not allow interest to be paid but partial repayments can be made. Meanwhile, interest is repayable on Optional Payment Indigo plan but partial capital repayments cannot be made.

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 15 December 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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