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

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Derin Clark

Derin Clark

Online Reporter
Published: 17/06/2021

Comparing some of the most competitive lifetime mortgage rates month-on-month reveals that a number of rates have fallen during June. This, combined with rising house prices, makes equity release highly attractive to homeowners aged over the age of 55 looking to release equity from their home. Saying this, equity release still has a long-term impact on finances, especially on the inheritance the borrower leaves to loved ones, and as a result those considering equity release should speak to an independent financial advisor first to make sure it is the right decision for their personal 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 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.

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

Legal & General Home Finance

Flexible Orange

3.07%
 (3.2%)

£100,000

30.7%

No

Yes

£599

Legal & General Home Finance

Optional Payment Orange

3.07%
 (3.2%)

£100,000

30.7%

Yes

No

£599

Canada Life

Lifestyle Gold (Flexible)

3.09%
 (3.2%)

£70,000

31%

No

No

£650

Legal & General Home Finance

Flexible Yellow

3.15%
 (3.2%)

£100,000

32.7%

No

Yes

£599

Legal & General Home Finance

Optional Payment Yellow

3.15%
 (3.2%)

£100,000

32.7%

Yes

No

£599

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

 

This month, Legal & General Home Finance has two of the most competitive rates at a minimum 30% loan-to-value (LTV). Both its Flexible Orange and Optional Payment Orange offer 3.07% AER (3.2% APR) and are available to those with a maximum LTV of 30.7% at the age of 70. Both plans require properties to be valued at a minimum £100,000 and allow a minimum advance of £10,000 to a maximum of £750,000. The Flexible Orange plan does not allow interest to be paid but partial repayments up to 10% per annum are allowed. The Optional Payment Orange plan does allow interest to be paid but does not permit partial repayments. Both plans charge a £599 fee.

Also offering a highly competitive rate this month was Canada Life with its Lifestyle Gold (Flexible) plan offering 3.09% AER (3.2% APR). To apply for this plan borrowers must have a property valued at a minimum of £70,000 and it requires a maximum 31% LTV at the age of 70. A minimum advance of £10,000 is allowed, to a maximum of £1 million. The plan does not permit interest payments but partial repayments up to 10% per annum are allowed.

Legal & General’s Flexible Yellow and Optional Payment Yellow plans were both competitive this month offering 3.15% AER (3.2% APR). These plans are available at a maximum 32.7% LTV at the age of 70 and properties must be valued at a minimum of £100,000. The plans allow a minimum advance of £10,000 to a maximum of £750,000. Partial repayments up to 10% per annum can be paid on the Flexible Yellow plan, but interest is not payable. Whereas, Optional Payment Yellow allows interest to be paid but partial repayments are not permitted.

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*

Legal & General Home Finance

Flexible Orange

3.11%
 (3.2%)

£100,000

30.7%

No

Yes

Legal & General Home Finance

Optional Payment Orange

3.11%
 (3.2%)

£100,000

30.7%

Yes

No

More 2 Life

Capital Choice Superlite Drawdown 3

3.12%
 (3.2%)

£100,000

31%

No

Yes

LV=

Lifetime Mortgage Drawdown+ Standard 2

3.15%

(3.2%)

£100,000

30%

No

Yes

LV=

Lifetime Mortgage Drawdown+ Standard 2 - 1% CB

3.16%
 (3.1%)

£100,000

30%

No

Yes

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

 

Legal & General Home Finance was also highly competitive amongst plans at a minimum 30% LTV that does not charge a fee with its Flexible Orange and Optional Payment Orange plans offering 3.11% AER (3.2% APR). These plans are available to those with a maximum 30.7% LTV at the age of 70. These plans require properties to be valued at a minimum £100,000. They allow a minimum advance of £10,000 to a maximum of £750,000. Flexible Orange does not allow interest to be paid but partial repayments up to 10% per annum are permitted. Optional Payment Orange, however, does not allow partial repayments but does allow interest repayments.

More 2 Life’s Capital Choice Superlite Drawdown 3 was competitive this month offering 3.12% AER (3.2% APR), which is available at a maximum 31% LTV at the age of 70. This plan requires properties to be valued at a minimum of £100,000. It allows a minimum advance of £10,000 to a maximum of £150,000. The plan allows partial repayments up to 10% per annum but interest payments are not permitted.

Also offering a highly competitive rate this month was LV= with its Lifetime Mortgage Drawdown+ Standard 2 and Lifetime Mortgage Drawdown+ Standard 2 – 1% CB. Both plans are available at a maximum 31% LTV at the age of 70 and properties must be valued at a minimum of £100,000. Borrowers can take a minimum advance of £10,000 to a maximum of £1.5 million. Interest is not payable on these plans, but they do permit partial repayments up to 10% per annum.

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)

3.74%
 (3.9%)

 

£70,000

40

No

Yes

£895

Pure Retirement

Heritage Drawdown Plus Standard Package (GILT ERCs)

3.74%
 (3.9%)

£70,000

40

No

Yes

£895

Legal & General Home Finance

Flexible Indigo

3.98%
 (4.1%)

£100,000

41.2

No

Yes

£599

Legal & General Home Finance

Optional Payment Indigo

3.98%
 (4.1%)

£100,000

41.2

Yes

No

£599

Pure Retirement

Heritage Full Valuation Freedom 40 Drawdown Plus

4.00%
 (4.1%)

£70,000

40

No

Yes

£895

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

 

Two of the most competitive lifetime mortgage plans available at a minimum 40% LTV that charge a fee during June came from Pure Retirement which offers 3.74% AER (3.9%% APR) on both its Heritage Drawdown Plus Standard Package (Fixed ERCs) and Heritage Drawdown Plus Standard Package (GILT ERCs). Both plans are available at a maximum 40% LTV at the age of 70 and properties must be valued at a minimum of £70,000. These plans all a minimum advance of £10,000 to a maximum of £800,000. They allow partial repayments up to 10% per annum but interest payments cannot be made. Both plans charge a fee of £895.

Legal & General Home Finance also had two highly competitive plans this month with its Flexible Indigo and Optional Payment Indigo plans offering 3.98% AER (4.1% APR). These plans are available to those with a maximum 41.2% LTV at the age of 70 and properties must be valued at a minimum of £100,000. They allow a minimum advance of £10,000 to a maximum of £750,000 Flexible Indigo does not allow interest repayments but partial repayments up to 10% per annum are permitted. Optional Payment Indigo allows interest payments to be made but partial repayments cannot be made. These plans charge a fee of £599.

Pure Retirement’s Heritage Full Valuation Freedom 40 Drawdown Plus was also competitive this month offering 4.00% AER (4.1% APR). It is available to those with a maximum 40% 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 £800,000. Interest is not payable but partial repayments up to 10% per annum can be made. 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

3.75%
 (3.8%)

£100,000

40.03%

No

Yes

More 2 Life

Capital Choice Max 3 Drawdown

3.90%
 (4.0%)

£100,000

41%

No

Yes

Legal & General Home Finance

Flexible Indigo

4.02%
 (4.1%)

£100,000

41.2%

No

Yes

Legal & General Home Finance

Optional Payment Indigo

4.02%
 (4.1%)

£100,000

41.2%

Yes

No

Just

J3 Drawdown - Interest payment >25.01%

4.03%
 (4.0%)

£70,000

41.2%

Yes

No

Just

J3 Drawdown

4.08%
 (4.1%)

£70,000

41.2%

No

Yes

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

 

During June More 2 Life had two highly competitive lifetime mortgage plans at a minimum 40% LTV that do not charge a fee. Its Capital Choice Max 2 Drawdown offers 3.75% AER (3.8% APR) and is available to those with a maximum 40.03% at the age of 70. Capital Choice Max 3 Drawdown offers 3.90% AER (4.0% APR), which is available at a maximum 41% LTV at the age of 70. These plans require properties to be valued at a minimum of £100,000. They both allow a minimum advance of £10,000 to a maximum of £1.5 million. Interest is not payable on these plans but partial repayments up to the age of 10% per annum are permitted.

Also offering two competitive plans this month was Legal & General Home Finance’s Flexible Indigo and Optional Payment Indigo offering 4.02% AER (4.1% APR). These plans are available to those with a maximum 41.2% LTV at the age of 70 and properties must be valued at a minimum of £100,000. The plans both allow a minimum advance of £10,000 to a maximum £750,000. Flexible Indigo does not allow interest payments but does permit partial repayments up to 10% per annum. Optional Payment Indigo allows interest payments but partial repayments cannot be made.

Just also had two competitive plans during June with its J3 Drawdown – Interest Payment >25.01% which offers 4.03% AER (4.0% APR) and J3 Drawdown which offers 4.08% AER (4.1% APR). Both plans are available to those with a maximum 41.2% LTV at the age of 70. Properties must be valued at a minimum of £70,000. J3 Drawdown – Interest Payment >25.01% allows a minimum advance of £20,000 to a maximum of £1 million It allows interest payments to be made but does not permit partial repayments. J3 Drawdown allows a minimum advance of £10,000 to a maximum of £1 million. It does not allow interest payments to be made but partial repayments can be made.

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 17 June 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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