The Best Lifetime Mortgage Rates March 2021 | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 26/03/2021

Homeowners over the age of 55 who are looking to release equity from their home, but who do not want to downsize by moving home, may want to consider a lifetime mortgage. Over the last few years the lifetime mortgage market has become much more competitive, which has seen rates fall and more flexibility offered in products. While many lifetime mortgage plans have become more attractive, 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.

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.

Those looking for more information about lifetime mortgages 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
Canada Life Lifestyle Gold 3.09%
(3.2%)
£70,000 31 No No £650
Pure Retirement Classic Lite Plus 3.1%
(3.2%)
£125,000 30.5 No Yes £500
Legal & General Home Finance Flexible Orange 3.11%
(3.2%)
£100,000 30.7 No Yes £599
Legal & General Home Finance Optional Payment Orange 3.11%
(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.

 

This month, Canada Life offered a highly competitive lifetime mortgage rate on a plan that charged a fee and required a minimum LTV of 30%. Its Lifestyle Gold offers 3.09% AER (3.2% APR) and is available to those with a maximum 31% 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 £1 million. This plan does not allow interest to be repaid or partial repayments. It charges a fee of £650.

Also offering a highly competitive rate on a plan that requires a minimum 30% LTV this month was Pure Retirement with its Classic Lite Plus plan. This plan offers 3.1% AER (3.2% APR) and a maximum 30.5% LTV at the age of 70 applies. Properties must be valued from a minimum of £125,000 and it allows a minimum advance of £10,000 to a maximum of £1 million. Interest is not payable on this plan, but it does allow partial repayments of up to 10% per annum without an early repayment charge being applied. The plan charges a fee of £500.

Legal & General Home Finance offered a highly competitive rate of 3.11% AER (3.2% APR) on both its Flexible Orange and Optional Payment Orange plans. These plans are available to those with properties valued at a minimum of £100,000 and who have a 30.7% LTV at the age of 70. Both plans allow a minimum advance of £10,000 to a maximum of £750,000. Flexible Orange allows partial repayments of up to 10% per annum without an early repayment charge applying but interest is not payable. Optional Payment Orange does not permit penalty free partial repayments but interest is payable. Both plans charge a fee of £599.

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*
Legal & General Home Finance Flexible Orange 3.15%
(3.2%)
£100,000 30.7 No Yes
Legal & General Home Finance Optional Payment Orange 3.15%
(3.2%)
£100,000 30.7 Yes No
LV= Lifetime Mortgage Drawdown+ Standard 2 3.15%
(3.2%)
£100,000 30 No Yes
More 2 Life Ltd. Capital Choice SuperLite Drawdown 3 3.15%
(3.2%)
£100,000 31 No Yes

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

 

For those looking for a lifetime mortgage at a minimum 30% LTV and which does not charge a fee, Legal & General Home Finance had two highly competitive plans this month. Both its Flexible Orange and Optional Payment Orange plans offer 3.15% AER (3.2% APR) and are available to those with a maximum 30.7% LTV at the age of 70. Properties must be valued from a minimum of £100,000. These plans allow a minimum advance of £10,000 to a maximum of £75,000. Flexible Orange does not allow interest to be repaid but partial repayments of up to 10% per annum are permitted without an early repayment charge applying. Optional Payment Orange does not allow partial repayments but interest repayments can be made.

LV=’s Lifetime Mortgage Drawdown offers 3.11% AER (3.2% APR) and is available to those with a 30% LTV at the age of 70. Properties must be valued from a minimum of £100,000. This plan allows a minimum advance of £10,000 to a maximum of £1.5 million. Interest is not payable but partial repayments up to 10% per annum are allowed without an early repayment charge applying.

Also offering a highly competitive plan this month was More 2 Life Ltd. with its Capital Choice SuperLite Drawdown 3 plan offering 3.15% AER (3.2% APR). This plan is available to those with a maximum 31% LTV at the age of 70 and whose property is valued at a minimum of £100,000. It allows a minimum advance of £10,000 to a maximum of £1.5 million. Partial repayments up to 10% per annum can be made without an early repayment charge being applied but interest is not payable on this plan.

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) 4.07%
(4.2%)
£70,000 40 No Yes £895
Pure Retirement Heritage Drawdown Plus Standard Package (Fixed ERCs) 4.13%
(4.3%)
£70,000 40 No Yes £895
Legal & General Home Finance Flexible Indigo 4.26%
(4.3%)
£100,000 41.2 No Yes £599
Legal & General Home Finance Optional Payment Indigo 4.26%
(4.3%)
£100,000 41.2 Yes No £599
Pure Retirement Heritage Full Valuation Freedom 40 Drawdown Plus 4.39%
(4.5%)
£70,000 40 No Yes up to 40% of advances penalty free per year £895

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

 

Pure Retirement’s had two highly competitive plans this month that are available at a minimum 40% LTV and charge a fee. Its Heritage Drawdown Plus Standard Package (GILT ERCs) and Heritage Drawdown Plus Standard Package (Fixed ERCs) both offer 4.07% AER (4.2% APR) and are available to those with a maximum 40% LTV at the age of 70. Properties must be valued from a minimum of £70,000. They allow a minimum advance of £10,000 to a maximum of £800,000. Heritage Drawdown Plus Standard Package (GILT ERCs) allows partial repayments of up to 10% per annum without an early repayment charge being applied but interest is not payable. Heritage Drawdown Plus Standard Package (Fixed ERCs) does not allow partial repayments but interest is payable. Both plans charge a fee of £895.

Also offering highly competitive plans this month was Legal & General Home Finance with its Flexible Indigo and Optional Payment Indigo both offering 4.26% AER (4.3% APR). These plans require a maximum 41.2% LTV at the age of 70 and properties must be valued from a minimum of £100,000. Borrowers can take a minimum advance of £10,000 to a maximum of £750,000. These plans both charge a fee of £599. Flexible Indigo does not allow interest to be repaid but partial repayments of up to 10% per annum are allowed without an early repayment charge being applied. Optional Payment Indigo permits interest to be repaid but partial repayments are not allowed.

Another highly competitive plan from Pure Retirement this month was its Heritage Full Valuation Freedom 40 Drawdown Plus which offers 4.39% AER (4.5% APR). Those applying for this plan must have a maximum 40% LTV at the age of 70 and their property must be valued from 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 can be made without an early repayment charge applying. Interest cannot be repaid. This plan charges a fee of £895.

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 4.3%
(4.3%)
£70,000 41.2 No Yes
Legal & General Home Finance Flexible Indigo 4.3%
(4.3%)
£100,000 41.2 No Yes
Legal & General Home Finance Optional Payment Indigo 4.3%
(4.3%)
£100,000 41.2 Yes No
More 2 Life Tailored Lifetime 5 Drawdown 4.3%
(4.4%)
£70,000 41.2 No Yes

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

 

This month Just continued to offer one of the most competitive lifetime mortgage plans at a minimum 40% LTV and which does not charge a fee. Its J3 Drawdown offers 4.3% AER (4.3% APR) and offers a maximum 41.2% 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 £1 million. This plan allows partial repayments of up to 10% per annum without an early repayment charge being applied. Interest is not payable.

Legal & General Home Finance had two highly competitive plans this month. Both its Flexible Indigo and Optional Payment Indigo offer 4.3% AER (4.3% APR). They offer a maximum 41.2% LTV at the age of 70 and properties must be valued from a minimum of £100,000. Borrowers can take a minimum advance of £10,000 to a maximum of £750,000. The Flexible Indigo plan does not allow interest repayments but partial repayments of up to 10% can be made without an early repayment charge being applied. The Optional Payment Indigo plan allows interest to be repaid but partial repayments are not allowed.

Also offering a highly competitive plan this month was More 2 Life with its Tailored Lifetime 5 Drawdown which offers 4.3% AER (4.4% APR). This plan is available to those with a maximum 41.2% LTV at the age of 70. Properties must be valued from a minimum of £70,000. The plan allows borrowers to take a minimum advance of £10,000 to a maximum of £800,000. It allows partial repayments of up to 10% per annum without applying an early repayment charge, but interest is not payable.

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 26 March 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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