Lifetime Mortgage

Life time mortgages are a form of equity release. Usually used by elderly people to provide extra income, lifetime mortgages allow you to obtain a part of the value of the property you own and still retain full ownership until your death.

With this type of mortgage you obtain a portion of the value locked in your property. This amount of money can be provided to you in a lump sum payment or in installments. Interest is added to the amount you receive and after your death the original or total amount you receive plus interest on it is recuperated by the sale of your property.

Even if the interest is deferred it is important what rate you choose, fixed or discounted variable, as it will be deducted from the maximum limit of equity release that your lender will allow.

All lenders that subscribe to the Safe Home Income Plan will have a negative equity guarantee. This protects you from drops in property value that would otherwise force you to repay the debt by other means than the sale of your property after your death.

Before signing this type of mortgage agreement make sure that it comes with a negative equity guarantee, make sure that your spouse will be able to retain full ownership of the property after your death and that the debt will not be passed onto your relatives if the sale of your property will not cover it.