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

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Derin Clark

Derin Clark

Online Reporter
Published: 27/05/2021

As house prices continue to rise, homeowners over the age of 55 may be considering unlocking some of the equity they have built up in their home through equity release. Although equity release can be a good way to boost retirement incomes, those considering this option should be aware of the long-term financial consequences of equity release and should, therefore, speak to an independent financial adviser before deciding to go ahead. For those who are confident that equity release is the right option for them, to help get an idea of what rates are currently available, we’ve highlighted some of the lowest rates in the market during May.

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.

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

Pure Retirement

Classic Lite Plus

3.03%
 (3.1%)

£125,000

30.5%

No

Yes

£500

Canada Life

Lifestyle Gold (Flexible)

3.09%
 (3.2%)

£70,000

31%

No

No

£650

Legal & General Home Finance

Flexible Orange

3.09%
 (3.2%)

£100,000

30.7%

No

Yes

£599

Legal & General Home Finance

Optional Payment Orange

3.09%
 (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.

 

For those looking for an equity release plan at a minimum 30% loan-to-value (LTV) Pure Retirement had one of the most competitive deals that charges a fee during May. Its Classic Lite Plus plan offers 3.03% AER (3.1% APR) and is available to those with a maximum LTV of 30.5% at the age of 70. This plan requires properties be valued at a minimum of £125,000. It allows a minimum advance of £10,000 to a maximum of £1 million. Interest is not payable, but partial repayments up to 10% per annum can be made without an early repayment charge. It charges a fee of £500.

Canada Life also had a highly competitive plan at a minimum 30% LTV that charges a fee. The plan Lifestyle Gold (Flexible) offers 3.09% AER (3.2% APR) and offers a maximum 31% LTV at the age of 70. Properties must be valued at a minimum of £70,000 and it allows a minimum advance of £10,000 to a maximum of £1 million. The plan does not allow interest to be paid or penalty free partial repayments. It charges a fee of £650.

Legal & General Home Finance had two highly competitive plans at a minimum 30% LTV that charges a fee. Both its Flexible Orange and Optional Payment Orange offer 3.09% AER (3.2% APR) and require a maximum LTV of 30.7% 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 allows partial repayments of up to 10% per annum without a charge but interest is not payable. Optional Payment Orange requires interest to be paid but partial repayments are not permitted. Both plans charge a fee of £599.

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

3.12%

(3.2%)

£100,000

31%

No

Yes

Legal & General Home Finance

Flexible Orange

3.13%
 (3.2%)

£100,000

30.7%

No

Yes

Legal & General Home Finance

Optional Payment Orange

3.13%
 (3.2%)

£100,000

30.7%

Yes

No

LV=

Lifetime Mortgage Drawdown+ Standard 2 - 1% CB

3.15%
 (3.1%)

£100,000

30%

No

Yes

LV=

Lifetime Mortgage Drawdown+ Standard 2

3.15%
 (3.1%)

£100,000

30%

No

Yes

* 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 30% LTV that does not charge a fee comes from More 2 Life with its Capital Choice Superlite Drawdown 3 offering 3.12% AER (3.2% APR). This plan is available at a maximum 31% LTV at the age of 70. It requires that properties be valued at a minimum of £100,000. The minimum advance available is £10,000 to a maximum of £1.5 million. Interest is not payable on this plan, but partial repayments of up to 10% per annum are allowed without a charge.

Both Flexible Orange and Optional Payment Orange from Legal & General Home Finance were highly competitive during May offering 3.09% AER (3.13% APR). Both plans offer a maximum LTV of 30.7% at the age of 70 and require that properties be valued at a minimum of £100,000. These 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 a charge but interest cannot be paid. Optional Payment Orange does not allow partial repayments but interest is payable.

LV= also had to highly competitive plans at a minimum 30% LTV this month, with its Lifetime Mortgage Drawdown+ Standard 2 – 1% CB offering 3.15% AER (3.1% APR) and Lifetime Mortgage Drawdown+ Standard 2 offer 3.15% AER (3.2% APR). Both plans require a 30% LTV at the age of 70 and properties must be valued at a minimum £100,000. They allow a minimum advance of £10,000 to a maximum of £1.5 million. These plans do not allow interest to be paid but partial repayments up to 10% per annum can be made without a charge.

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)

3.80%
 (3.9%)

£70,000

40%

No

Yes

£895

Pure Retirement

Heritage Drawdown Plus Standard Package (GILT ERCs)

3.80%
 (3.9%)

£70,000

40%

No

Yes

£895

Legal & General Home Finance

Flexible Indigo

4.04%
 (4.1%)

£100,000

41.2%

No

Yes

£599

Legal & General Home Finance

Optional Payment Indigo

4.04%
 (4.1%)

£100,000

41.2%

Yes

No

£599

Pure Retirement

Heritage Full Valuation Freedom 40 Drawdown Plus

4.06%
 (4.2%)

£70,000

40%

No

Yes up to 40% per annum

£895

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

 

Pure Retirement had a number of highly competitive plans at a minimum 40% LTV that charge a fee during May. Both its Heritage Drawdown Plus Standard Package (Fixed ERCs) and Heritage Drawdown Plus Standard Package (GILT ERCs) offer 3.80% AER (3.9% APR). These plans require a maximum LTV of 40% at the age of 70. Properties must be valued at a minimum of £70,000. These plans allow a minimum advance of £10,000 to a maximum of £800,000. Interest is not payable but partial repayments up to 10% per annum are allowed without charge. Both plans charge a £895 fee.

Legal & General Home Finance’s Flexible Indigo and Optional Payment Indigo both offer 4.04% AER (4.1% APR). These plans are available at a maximum 41.2% LTV at the age of 70 and properties must be valued at a minimum of £100,000. They allow minimum advances of £10,000 to a maximum of £750,000. Flexible Indigo allows partial repayments up to 10% per annum without charge but interest cannot be paid. Optional Payment Indigo requires interest to be paid but partial repayments are not permitted. Both plans charge a fee of £599.

Another highly competitive plan from Pure Retirement this month was its Heritage Full Valuation Freedom 40 Drawdown Plus which offers 4.06% AER (4.2% APR). This plan requires a maximum LTV of 40% at the age of 70. Properties must be valued at a minimum of £70,000. It allows a minimum advance of £10,000 to a maximum of £800,000. Interest is not payable but partial repayments up to 40% per annum can be made without a charge. The plan 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*

Just

J3 Drawdown - Interest payment >25.01%

4.03%
 (4%)

£70,000

41.2%

Yes

No

Just

J3 Drawdown

4.08%
 (4.1%)

£70,000

41.2%

No

Yes

Legal & General Home Finance

Flexible Indigo

4.08%
 (4.1%)

£100,000

41.2%

No

Yes

Legal & General Home Finance

Optional Payment Indigo

4.08%
 (4.1%)

£100,000

41.2%

Yes

No

More 2 Life

Tailored Lifetime 5 Drawdown

4.08%
 (4.2%)

£70,000

41.2%

No

Yes

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

 

Homeowners looking for an equity release plan at a minimum 40% LTV that does not charge a fee will find that Just had two highly competitive plans this week. Its J3 Drawdown – Interest payment >25.01% offers 4.03% AER (4% APR) and its J3 Drawdown offer 4.08% AER (4.1% APR). Both deals offer a maximum LTV of 41.2% 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, while J3 Drawdown allows a minimum advance of £10,000. Both plans allow a maximum advance of £1 million. J3 Drawdown Interest payment >25.01% requires at least 25% of monthly interest to be paid but partial repayments are not permitted. J3 Drawdown does not allow interest to be paid but partial repayments up to 10% per annum are allowed without a charge.

Two plans from Legal & General Home Finance had highly competitive rates at a minimum 40% LTV and which do not charge a fee. Its Flexible Indigo and Optional Payment Indigo both offer 4.08% AER (4.1% APR) and require a maximum LTV of 41.2% 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 Indigo does not allow interest to be paid but partial repayments up to 10% per annum are allowed without charge. Optional Payment Indigo does not allow partial repayments but interest can be paid.

More 2 Life also had a very competitive plan this month with its Tailored Lifetime 5 Drawdown offering 4.08% AER (4.2% APR). It offers a maximum LTV of 41.2% at the age of 70 and properties must be valued at a minimum of £70,000. It allows a minimum advance of £10,000 to a maximum of £800,000. Interest is not payable but partial repayments are allowed up to 10% per annum without a charge.

How these charts have been compiled

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

For more information about equity release read our equity release explained guide.

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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