Interest only lifetime mortgages
Interest only lifetime mortgages were released into the market in 2006 and allow lifetime mortgage customers to make monthly interest payments on their mortgage. The payments can either but full or partial payments and will go towards reducing or eliminating the roll-up of interest. Unlike a standard roll-up mortgage making regular interest payments allows you to reduce the overall amount of interest you may throughout the scheme.
Taking out a lifetime mortgage allows you to release a tax free cash lump sum that can be used for a varity of reasons such as help with money in retirement, home improvements, financial help for children and grand children. The money you receive can be spent as you wish.
How much will my interest payments be?
The amount you pay each month will be worked out between yourself and your financial advisor and will depend on how much you can comfortably afford to pay each month. This is then submitted to the lender as part of your mortgage application. Our equity release experts can provide you with a detailed quote and personal advice on these types of mortgages.
What happens if I can no longer afford to make interest payments
If you were no longer able to make interest payments or you changed your mind then your mortgage would simply revert to the roll-up lifetime mortgage. This means that the interest due would roll-up and be paid at the end of the mortgage term. It is important to discuss the consequences of this with your equity release advisor.
Can I release more equity later on?
Yes this is possible and if you would like further funds then you will need to speak with your equity release advisor who can provide advice and guidance on your options. They can also provide you with advice and a quote on how much additional money you may be able to receive. As done previously you can also then decide whether to make monthly interest payments or allow the interest to roll-up.