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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.


Options Initial advance Drawdown year 5 Drawdown year 7 Drawdown year 9 Drawdown year 10 Interest charged (15 years) Total owed (15 years)
Single advance £64,000 n/a n/a n/a n/a £91,565 £155,565
Drawdown £20,000 £15,000 £8,000 £7,000 £14,000 £53,388 £117,388
SAVING £38,177

Want to find out more?

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To learn more about equity release, get the full facts on what it is and how it works, download our free guide
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Things to consider

When comparing the whole equity release market, our independent specialist advisers will explain:

  • You have to get advice before releasing equity. Please read all our information and make sure it's right for you
  • The plans we recommend have a no negative equity guarantee, so you’ll never owe more than your home’s value
  • Equity release reduces your estate's value and may affect any means-tested benefits you're eligible for
  • Some providers may not guarantee the reserve facility that you can draw down from and it could be withdrawn at a later date
  • The initial consultation is free with no obligation and if you proceed with an equity release plan our advice fee, usually 1.99% of the amount released (£1,499 minimum), payable on completion
  • A lifetime mortgage, which is a loan secured against your home, is the most popular form of equity release and you will still own your home