Best Lifetime Mortgage Rates During November 2020 | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 27/11/2020

Lifetime mortgage rates have been falling over the past years, making the deals far more competitive. As such, borrowers considering releasing equity from their homes have many more plans to choose from. Although speaking to an equity release broker can help borrowers to choose the right product for their individual circumstances (and some products may only be available from an independent equity release adviser), below we’ve highlighted a selection of the lowest rates available on lifetime mortgages that allow drawdown.

It should be noted that the plans we’ve highlighted are not endorsed by Moneyfacts.co.uk, but have instead been chosen because they offer the lowest rates listed by Moneyfacts for the scenario that we have selected. For more information about equity release, take a look at our equity release FAQs page.

The best lifetime mortgage drawdown rates with a fee

Provider Plan name AER (APR) Minimum property value Max LTV (%)
at age 70
Interest payable Partial repayments Fee
Legal & General Home Finance Flexible Orange 2.70%
(2.8%)
£100,000 30.7% No Yes £599
Legal & General Home Finance Optional Payment Orange 2.70%
(2.8%)
£100,000 30.7% Yes No £599
Pure Retirement Classic Lite Plus 2 2.70%
(2.8%)
£125,000 30.5% No Yes £500
Legal & General Home Finance Flexible Yellow 2.81%
(2.9%)
£100,000 32.7% No Yes £599
Legal & General Home Finance Optional Payment Yellow 2.81%
(2.9%)
£100,000 32.7% Yes No £599
Pure Retirement Classic Midi 2 2.82%
(2.9%)
£125,000 33% No Yes £500
Canada Life Lifestyle Gold (Flexible) 2.94%
(3.1%)
£70,000 31% No No £650
Legal & General Home Finance Flexible Green 2.96%
(3.0%)
£100,000 34.5% No Yes £599
Legal & General Home Finance Optional Payment Green 2.96%
(3.0%)
£100,000 34.5% Yes No £599
Legal & General Home Finance Flexible Turquoise 3.05%
(3.1%)
£100,000 36% No Yes £599
Legal & General Home Finance Optional Payment Turquoise 3.01%
(3.1%)
£100,000 36% Yes No £599

 

The lowest lifetime mortgage that offers drawdown and charges a fee is 2.7% AER, which is being offered on three plans. Legal & General Home Finance offers this rate on both its Flexible Orange and its Optional Payment Orange fee plans. Both plans are available on properties valued to a minimum of £100,000. A minimum advance of £10,000 is required and both plans charge a fee of £599. Interest is not payable on Flexible Orangebut partial repayments of up to 10% are permitted without an early repayment charge applying. Interest is payable on Optional Payment Orange but partial repayments are not allowed.

Pure Retirement also offers a rate of 2.7% AER on its Classic Lite Plus 2 plan, which is available on properties valued at a minimum £125,000. Borrowers must take a minimum advance of £10,000. A product fee of £500 is charged. Interest is not payable on this plan, and penalty free partial repayments of up to 10% are permitted.

The next lowest rate of 2.81% AER is being offered on two plans by Legal & General Home Finance. Its Flexible Yellow and Optional Payment Yellow plans both offer this rate and require a minimum property value of £100,000. Borrowers must take a minimum advance of £10,000. Product fees of £599 are charged on both plans. Interest is not payable on Flexible but partial repayments of up to 10% are permitted without an early repayment charge applying.. Interest is payable on Optional Payment Yellow but partial repayments are not allowed.

Pure Retirement offers a rate of 2.82% AER on its Classic Midi 2, which is available for properties valued from a minimum of £125,000. Borrowers must take an advance of £10,000. A fee of £500 is charged on this plan, which does not allow interest payments, but partial repayments penalty free partial repayments of up to 10% can be made.

Canada Life has a rate of 2.94% AER on its Lifestyle Gold (Flexible) plan. This plan is available on properties valued at a minimum of £70,000. Borrowers must take an advance of a minimum of £10,000. It charges a fee of £650. Interest is not payable and partial repayments are not allowed.

Legal & General Home Finance rounds up the lowest rates offering 2.96% AER on its Flexible and Optional Payment Green, as well as 3.01% on its Flexible Turquoise and Optional Payment Turquoise plans. All these plans are available on properties valued to a minimum of £100,000. Borrowers must take a minimum advance of £10,000. A fee of £599 is payable on all the plans. Interest is payable on Flexible Green and Flexible Turquoise, but partial repayments are not allowed on these plans. Interest is not payable on Optional Payment Green and Optional Payment Turquoise, but partial repayments of up to 10% are permitted penalty free.

The best lifetime mortgage drawdown rates without a fee

Provider Plan name AER (APR) Minimum property value Max LTV (%)
at age 70
Interest payable Partial repayments
LV= Lifetime Mortgage Drawdown+ Standard 2 2.54%
(2.7%)
£100,000 30% No Yes
LV= Lifetime Mortgage Drawdown+ Standard 3 2.57%
(2.7%)
£100,000 32% No Yes
More 2 Life Capital Choice Superlite Drawdown 3 2.66%
(2.7%)
£100,000 31% No Yes
More 2 Life Capital Choice Superlite Drawdown 4 2.67%
(2.7%)
£100,000 33% No Yes
Legal & General Home Finance Flexible Orange 2.74%
(2.8%)
£100,000 30.7% No Yes
Legal & General Home Finance Optional Payment Orange 2.74%
(2.8%)
£100,000 30.7% Yes No
Pure Retirement Classic Lite Plus 1 2.75%
(2.8%)
£125,000 30.5% No Yes
Legal & General Home Finance Flexible Yellow 2.85%
(2.9%)
£100,000 32.7% No Yes
Legal & General Home Finance Optional Payment Yellow 2.85%
(2.9%)
£100,000 32.7% Yes No
Pure Retirement Classic Midi 1 (Joint) 2.86%
(2.9%)
£125,000 33% No Yes
LV= Lifetime Mortgage Drawdown+ Max 2.87%
(2.9%)
£100,000 35% No Yes

 

The lowest lifetime mortgage rate being offered on an equity release plan charging no fee and offering drawdown comes from LV=, which offers 2.54% AER on its Lifetime Mortgage Drawdown+ Standard 2 plan. A slightly higher LTV is available at a rate of 2.57%. Both plans are available for properties valued from a minimum of £100,000 and borrowers must take a minimum advance of £10,000. Interest is not payable on either plan, but penalty free partial repayments up to 10% are allowed.

More 2 Life offers a rate of 2.66% AER on its Capital Choice Superlite Drawdown 3 plan and a rate of 2.67% AER on its Capital Choice Superlite Drawdown 4 plan. Both these plans are available for properties valued from a minimum of £100,000. Borrowers must take a £10,000 minimum advance. Interest is not payable on these plans, but partial repayments of up to 10% are allowed without penalty.

Legal & General Home Finance has a rate of 2.74% AER on its Flexible Orange and Optional Payment Orange plans. Both plans are available on properties valued from a minimum of £100,000 and borrowers must take an advance from a minimum of £10,000. Interest is not payable on Flexible Orange, but penalty free partial repayments of up to 10% per year are allowed. Interest is payable on Optional Payment Orange, but partial repayments are not permitted.

The next lowest rate comes from Pure Retirement, which offers 2.75% AER on its Classic Lite Plus 1 plan. This lifetime mortgage is available on properties valued from a minimum of £125,000. Borrowers must take a minimum advance of £10,000. Interest is not payable but partial repayments of up to 10% are allowed with this plan.

Legal & General Home Finance has a rate of 2.85% AER on its Flexible Yellow and Optional Payment Yellow plans. Both plans are available on properties valued from a minimum of £100,000. Borrowers must take a cash advance of £10,000. Interest is not payable on Flexible Yellow, but partial repayments of up to 10% can be made. Whereas on Optional Payment Yellow, interest is payable but partial repayments are not permitted.

Pure Retirement has a rate of 2.86% AER on its Classic Midi 1 plan, which is available on properties valued from a minimum of £125,000. Borrowers must take a minimum advance of £10,000. Interest is not payable on this plan, but partial repayments of up to 10% per year can be made.

Rounding up the lowest rates is LV=, which has a rate of 2.87% AER on its Lifetime Mortgage Drawdown+ Max plan. This plan is available on properties valued at a minimum of £100,000 and borrowers must take a minimum advance of £10,000. Interest is not payable on this plan, but partial repayments of up to 10% are allowed.

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 26 November 2020. The products chosen have been selected from joint equity release products offering a30% loan-to-value (LTV) or higher and are based on a scenario where the youngest borrower is aged 70 . The deals have been selected from products offering drawdown, and as such there may be cheaper rates available on deals offering a lump sum only.

As equity release has a long-term impact on finances and the inheritance the borrower leaves behind, those considering equity release should think about speaking to an independent financial adviser before taking out a plan to ensure it is the right option for their financial circumstances.

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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