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

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Derin Clark

Derin Clark

Online Reporter
Published: 29/09/2021

Lifetime mortgages are growing in popularity as the Equity Release Council reported this month that more homeowners are using property wealth to top-up pensions and to provide a living inheritance to children and grandchildren.

“UK households are converting unprecedented amounts of mortgage borrowing into property wealth as we look to move on from the worst of the pandemic,” explained David Burrowes, chairman of the Equity Release Council. “Combined with property price rises fuelled by the Stamp Duty holiday, homeowners have record equity to potentially draw upon in later life.”

To help homeowners decide whether a lifetime mortgage is right for them, below we’ve highlighted some of the most competitive rates available this month.

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.

The best lifetime mortgage drawdown rates with a fee at a 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 Premier Optional Payment Yellow  2.8%
(2.8%)
£1 million 32.7% Yes No £599
Legal & General Home Finance Premier Flexible Yellow  2.8%
(2.8%)
£1 million 32.7% No Yes £599
Legal & General Home Finance Flexible Orange  2.82%
(2.9%)
£70,000 30.7% No Yes £599
Legal & General Home Finance Optional Payment Orange 2.82%
(2.9%)
£70,000 30.7% Yes No £599

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

 

Homeowners looking for a lifetime mortgage plan at a minimum 30% loan-to-value (LTV) that charges a fee will find that this month Legal & General Home Finance had the four most competitive rates. Both its Premier Optional Payment Yellow and Premier Flexible Yellow are deals offering 2.8% AER (2.8% APR). The plans are available to those with a maximum LTV of 32.7% at the age of 70. Properties must be valued at a minimum of £1 million and a minimum advance of £50,000 can be taken. Premier Optional Payment Yellow allows interest repayments but partial repayments cannot be made, while Premier Flexible Yellow does not allow interest repayments but partial repayments can be made.

Legal & General Home Finance’s Optional Payment Orange and Flexible Orange products offer 2.8% AER (2.9% APR) and is available to homeowners with a maximum 30.7% LTV at the age of 70. This deal requires properties to be valued at a minimum of £70,000 and borrowers can take a minimum advance of £10,000. Partial repayments can be made on the Flexible Orange plan, but it does not allow interest to be repaid. Optional Payment Orange allows interest repayments but partial repayments are not permitted. Both options 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*
Legal & General Home Finance Flexible Orange 2.86%
(2.9%)
£70,000 30.7 No Yes
Legal & General Home Finance Optional Payment Orange 2.86%
(2.9%)
£70,000 30.7 Yes No
LV= Lifetime Mortgage Drawdown+ Standard 2 2.86%
(2.9%)
£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 also had some of the most competitive rates on lifetime mortgage plans without a fee at a minimum 30% LTV. Its Flexible Orange and Optional Payment Orange both offer 2.86% AER (2.9% APR) on plans that are available to those with a maximum 30.7% LTV at the age of 70. Properties must be valued at a minimum of £70,000 to be eligible for these plans. A minimum advance of £10,000 can be taken. Partial repayments can be made on the Flexible Orange plan, but it does not allow interest to be repaid. Optional Payment Orange allows interest repayments but partial repayments are not permitted.

LV= also offers 2.86% AER (2.9% APR) on its Lifetime Mortgage Drawdown+ Standard 2 plan. This plan is available to those with a maximum 30% LTV at the age of 70 and properties must be valued at a minimum of £100,000. The plan allows a minimum advance of £10,000. Interest is not payable but partial repayments can be made.

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
Legal & General Home Finance Flexible Indigo  3.56%
(3.6%)
£70,000 41.2% No Yes £599
Legal & General Home Finance Optional Payment Indigo  3.56%
(3.6%)
£70,000 41.2% Yes No £599
Pure Retirement Heritage Drawdown Plus Standard Package - (age 55-75) 3.61%
(3.7%)
£70,000 40% No Yes £895

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

 

Homeowners looking for a lifetime mortgage plan at a minimum 40% LTV and who are happy to pay a fee will find that Legal & General Home Finance had the most competitive rate of 3.56% AER (3.6% APR) on its Flexible Indigo and Optional payment Indigo plans. 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. The plans allow a minimum advance of £10,000 to be taken. Flexible Indigo - allows partial repayments but interest cannot be repaid, whereas Optional Payment Indigo does not allow partial repayments but interest is payable. Both plans charge a £599 fee.

Pure Retirement also had a highly competitive lifetime mortgage plan with its Heritage Drawdown plan offering 3.61% AER (3.7% APR). To be eligible for this plan borrowers must have a maximum 40% LTV at the age of 70 and own properties valued at a minimum of £70,000. It allows a minimum advance of £10,000 to be taken. Partial repayments can be made on this plan, but interest is not payable. It charges a £895 fee.

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*
More 2 Life Capital Choice Max 2 Drawdown 3.42%
(3.5%)
£100,000 40.03% No Yes
More 2 Life Capital Choice Max 3 Drawdown 3.55%
(3.6%)
£100,000 41% No Yes
Legal & General Home Finance Flexible Indigo 3.6%
(3.6%)
£70,000 41.2% No Yes
Legal & General Home Finance Optional Payment Indigo 3.6%
(3.6%)
£70,000 41.2% Yes No

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

 

Those looking for a lifetime mortgage plan at a minimum 40% LTV that does not charge a fee will find that More 2 Life had the most competitive plan with its Capital Choice Max 2 Drawdown offering 3.42% AER (3.5% APR). This plan is available to those with a maximum 40.03% LTV at the age of 70 and properties must be valued at a minimum of £100,000. A minimum advance of £10,000 can be taken. This plan allows partial repayments but interest cannot be paid.

More 2 Life Capital Choice Max 3 Drawdown also had a highly competitive rate of 3.55% AER (3.6% APR), which is available to those with a maximum 41% LTV at the age of 70. To be eligible for this plan properties must be valued at a minimum of £100,000. It allows a minimum advance of £10,000 to be taken. Again, this plan allows partial repayments but interest cannot be paid.

Also offering competitive rates this month was Legal & General Home Finance’s Flexible Indigo and Optional Payment Indigo plans which offer 3.6% AER (3.6% APR). The 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 £70,000. A minimum advance of £10,000 can be taken. Partial repayments can be made on the Flexible Indigo plan, but it does not allow interest to be repaid. Optional Payment Indigo allows interest repayments but partial repayments are not permitted.

How these charts have been compiled

These charts have been compiled from all equity release drawdown products listed by Moneyfacts on 28 September 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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