For example, with a lifetime mortgage, there’s no affordability check or requirement to make regular repayments. But with a retirement repayment mortgage, your affordability will be assessed as you need to make monthly repayments. Your home also may be repossessed if you fail to keep up with repayments.
Nevertheless, a retirement repayment mortgage is often a cheaper way to borrow money in the long run, if you can afford the repayments.
A lifetime mortgage is also subject to compound interest, which means if you choose not to make repayments, the amount you owe can grow quickly. That's because the loan, plus compound interest, is usually repaid when the plan ends.
A lifetime mortgage is typically repaid once the last applicant passes away or moves into long-term care and the property is sold. Meanwhile, a retirement repayment mortgage comes with a set end date. And once you’ve repaid your retirement repayment mortgage, you may have more property wealth to pass on to your beneficiaries.
If you’re considering a retirement repayment mortgage, it’s important to get advice from a qualified expert. Get in touch
with the team at Key today to discuss your options further.
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