Interest-Only Lifetime Mortgages
This is like a standard lifetime mortgage; however, you make regular payments so that the amount you owe remains constant. This amount would then be paid from the sale of the home, typically once you have passed away.
Advantages of Interest-Only Lifetime Mortgages
Plans available from the age of 55
The cash you release is tax free and can be spent on whatever you like
You continue to own 100% of our home, thereby benefiting fully from any future increase in its value
By paying the interest each month you limit the impact of releasing equity on the size of your estate
With some interest-only lifetime mortgages, you can release considerably more than would be available from a standard lifetime mortgage
Disadvantages of a Interest-Only Lifetime Mortgages
Your tax position and eligibility of means-tested benefits may be affected, as might your options for moving or selling your home in the future
The amount that you will leave as an inheritance is likely to be reduced
If you wish to pay off the equity release plan early, you may have to pay an early repayment charge - these differ from plan to plan
With some type of interest-only, your home may be repossessed if you do not keep up repayments on your mortgage