A Lifetime Mortgage is secured on your property and you continue to own your own home 100% – much like a standard residential mortgage.  The main difference however is that you are not assessed on your affordability as the lenders do not require any monthly payment.  The amount taken plus interest is paid back upon death or long term care.  If you are making a joint application then it is paid back on second death or second person going into long term care.  You can however make payments if you choose to do so.

You have the option to fix the interest rate for life and depending on what you require there are various other features and benefits you can have such as fixed early repayment charges, inheritance protection and downsizing protection.

All providers are members of the Equity Release Council that adhere to strict guidelines and rules.  One of which is a “no negative equity guarantee” which means there will never be a debt left to your estate.

With a Lifetime Mortgage you also have the option to have a drawdown facility rather than taking it all as a lump sum.  This is the better option if you dont require all the funds straight away as you will only accrue interest on the amount of cash taken.

This makes up less than about 1% of the whole Equity Release marketplace and involves selling all or part of your home.

In return you get a lump sum along with a lifelong tenancy to remain in your home.

There is no interest rate as the home reversion company would own (or part own) your property.

You would never get the full market market value of your property and may receive less than 50% depending on your age.  Again there would be no monthly payments due however the reversion company would own the proportion of property sold.

These schemes are not widely used nowadays due to this set up – Reynolds Financial does not offer advice on Home Reversion Schemes