What is a drawdown lifetime mortgage?
A drawdown lifetime mortgage offers more freedom to release money when you like. Your lender agrees an overall sum of money you can borrow. You can take an initial lump sum and then withdraw smaller amounts when you need it (subject to minimum amounts).
As interest only accrues on the money you've released, you could potentially save a considerable amount in interest over the lifetime of the mortgage.
In addition to the features and considerations of a lifetime mortgage, the details of a drawdown lifetime mortgage are as follows:
- You could potentially reduce the cost of equity release by only taking as much as you need from your home at any one time
- These plans are more flexible than lump sum plans, meaning you can adapt to your changing needs in retirement
- These plans can help you organise your finances so you don’t miss out on means-tested benefits
- You can use the money you release for any purpose and can cover specific expenses, including home improvements or to pay university fees
Comparison between a lump sum lifetime mortgage and a drawdown option
Comparison between a standard lifetime mortgage and a drawdown option of £64,000 released over 15 years with an interest rate of 6.1%. For illustrative purposes only. The interest rate applied to drawdowns will be the interest rate at the time of the drawdown.