Best Lifetime Mortgage Rates During February 2021 | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 26/02/2021

A lifetime mortgage can be a good way for those aged 55 and over to release equity built up in their house without having to move home. While there are benefits to taking out a lifetime mortgage, it can have a long-term impact on finances and those considering this option should speak to an independent financial adviser before going ahead to ensure it is the best decision for their circumstances.

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 suits 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.

Those looking for more information about equity release should take a look at our equity release FAQs page.

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 2.56%
(2.6%)
£125,000 30.5% No Yes £500
Pure Retirement Classic Midi 2.65%
(2.7%)
£125,000 33% No Yes £500
Canada Life Lifestyle Gold 2.71%
(2.8%)
£70,000 31% No No £650

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

 

Pure Retirement had the most competitive lifetime mortgage rates on a plan that charged a fee from a minimum of 30% LTV. Its Classic Lite Plus plan offers 2.56% AER (2.6% APR) and is available to those with a maximum 30.5% LTV at the age of 70. Meanwhile, its Classic Midi plan was also highly competitive offering 2.65% AER (2.7% APR) and is available to those with a maximum 33% LTV at the age of 70. Both plans require properties to be valued at a minimum of £125,000 and need a minimum advance of £10,000 to a maximum of £1 million. These plans allow partial repayments of up to 10% per annum without an early repayment charge being applied, but interest is not payable. The plans charge a fee of £500.

Canada Life also had a highly competitive lifetime mortgage rate this month with its Lifestyle Gold plan offering 2.71% AER (2.8% APR). This plan is available to those with a maximum 33% LTV at the age of 70. Properties must be valued from a minimum of £70,000. The minimum advance on this deal is £10,000 up to a £1 million maximum. Interest is not payable and penalty free partial repayments are not allowed with this deal. It charges a fee of £650.

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*
LV= Lifetime Mortgage Drawdown+ Standard 2 2.57%
(2.7%)
£100,000 30% No Yes
Pure Retirement Classic Lite Plus 2.61%
(2.7%)
£125,000 30.5% No Yes
More 2 Life Capital Choice Superlite Drawdown 3 2.66%
(2.7%)
£100,000 31% No Yes

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

 

The most competitive lifetime mortgage plan from a minimum 30% LTV that does not charge a fee is from LV=. Its Lifetime Mortgage Drawdown+ Standard 2 plan offers 2.57% AER (2.7% APR) and is available to those with a maximum 30% LTV at the age of 70. To qualify for this plan properties must be valued from a minimum of £100,000. It allows a minimum advance of £10,000 to a maximum of £1.5 million. Interest is not payable with this plan but partial repayments of up to 10% per annum are allowed without an early repayment charge applying.

Pure Retirement also offered a competitive lifetime mortgage plan this month with its Classic Lite Plus plan offering 2.61% AER (2.7% APR). This plan is available at a maximum 30.5% LTV at the age of 70 and properties must be valued from a minimum of £125,000. It allows a minimum advance of £10,000 to a maximum of £1 million. Partial repayments of up to 10% per annum are permitted without an early repayment charge but interest is not payable.

Another highly competitive plan this month came from More 2 Life which offers 2.66% AER (2.7% APR) on its Capital Choice Superlite Drawdown 3 plan. It is available to those with a maximum 31% LTV at the age of 70. Properties need to be from a minimum value of £100,000. The plan allows a minimum advance from £10,000 to a maximum of £1.5 million. Interest is not payable but partial repayments of up to 10% per annum are allowed without an early repayment charge being applied.

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) 3.72%
(3.9%)
£70,000 40% No Yes £895
Pure Retirement Heritage Drawdown Plus Standard Package (Fixed ERCs) 3.77%
(3.9%)
£70,000 40% No Yes £895
Pure Retirement Heritage Full Valuation Freedom 40 Drawdown Plus 4.03%
(4.2%)
£70,000 40% No Yes** £895
Legal & General Home Finance Flexible Indigo 4.14%
(4.2%)
£100,000 41.2% No Yes £599
Legal & General Home Finance Optional Payment Indigo 4.14%
(4.2%)
£100,000 41.2% Yes No £599

* Partial repayments of up to 10% per annum are permitted without an early repayment charge applying.
** Partial repayments of up to 40% per annum are permitted without an early repayment charge applying.

 

Pure Retirement offered a number of highly competitive plans from a minimum 40% LTV that charged a fee. Its most competitive plan is its Heritage Drawdown Plus Standard Package (GILT ERCs) that offers 3.72% AER (3.9% APR). Pure Retirement’s Heritage Drawdown Plus Standard Package (Fixed ERCs) is also highly competitive, offering 3.77% AER (3.9% APR). Both plans are available to those with a maximum 40% LTV at the age of 70 and whose property is valued at a minimum of £70,000. They allow a minimum advance of £10,000 to a maximum of £800,000. Interest is not payable on these plans but partial repayments of up to 10% per annum are allowed without an early repayment charge applying. Both plans charge a fee of £895.

Another highly competitive plan from Pure Retirement is its Heritage Full Valuation Freedom plan. This plan offers 4.03% AER (4.2% APR) and is available to those with a maximum 40% LTV at the age of 70. Properties must be valued from a minimum of £70,000. It allows a minimum advance of £10,000 to a maximum of £800,000. This plan allows partial repayments of up to 40% per annum without an early repayment charge being applied but interest is not payable. It charges an £895 fee.

Legal & General Home Finance also offered a range of highly competitive plans this month. Its Flexible Indigo and Optional Payment Indio plans both offer 4.14% AER (4.2% APR). These plans require a maximum of 41.2% LTV at the age of 70 and properties must be valued at a minimum of £100,000. Partial repayments of up to 10% per annum without an early repayment charge applying are allowed on the Flexible Indigo plan but interest is not payable. Meanwhile, interest is payable on the Optional Payment Indigo plan, but penalty free partial repayments cannot be made. Both plans charge a fee of £599.

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*
Just J3 Drawdown 3.88%
(3.9%)
£70,000 41.2% No Yes
More 2 Life Tailored Lifetime 5 Drawdown 3.88%
(3.9%)
£70,000 41.2% No Yes
Legal & General Home Finance Flexible Indigo 4.18%
(4.2%)
£100,000 41.2% No Yes
Legal & General Home Finance Optional Payment Indigo 4.18%
(4.2%)
£100,000 41.2% Yes No

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

 

Just has a range of highly competitive lifetime mortgage plans at a 40% LTV that do not charge a fee. One of its most competitive plans is its J3 Drawdown which offers 3.88% AER (3.9% APR). This plan is available to those with a maximum 41.2% LTV at the age of 70 and whose property is valued at a minimum of £70,000. It allows a minimum advance of £10,000 to a maximum of £800,000. Partial repayments of up to 10% per annum are allowed without an early repayment charge being applied, but interest is not payable.

More 2 Life also had a number of competitive plans this month, including its Tailored Lifetime 5 Drawdown which offers 3.88% AER (3.9% APR). This plan is available to those with a maximum 41.2% LTV at the age of 70. Properties must be valued at a minimum £70,000. It allows a minimum advance of £10,000 to a maximum of £800,000. Interest is not payable but partial repayments of up to 10% per annum are permitted without an early repayment charge applying.

Another lifetime mortgage provider offering highly competitive plans this month was Legal & General Home Finance. Two of its most competitive plans are Flexible Indigo and Optional Payment Indigo, which both offer 4.18% AER (4.2% APR). These plans are available to those with a maximum 41.2% LTV at the age of 70 and require properties to be valued at a minimum of £100,000. Both plans allow a minimum advance of £10,000 to a maximum of £750,000. The Flexible Indigo allows partial repayments up to 10% per annum without an early repayment charge being applied, but interest is not payable. The Optional Payment Indigo plan, however, does not allow partial repayments but interest is payable.

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 25 February 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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