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Lifetime mortgages explained and how you may apply

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A very common search in Google is “lifetime mortgage vs equity release.” You might even have looked it up yourself.

However, a lifetime mortgage is the most popular form of equity release.

A lifetime mortgage can allow homeowners aged 55 to 95 access some of the cash tied up in the value of their home. What’s more, the money released is tax-free.

Typically, you can release between 5 and 55% of the value of your property with a lifetime mortgage*. Exactly how much depends on your age, property value, health and lifestyle.

A lifetime mortgage is a loan secured against your home. That loan can either be taken as a single lump sum or, following an initial smaller withdrawal, released in additional amounts as and when you want to. This is known as a drawdown.

Whichever you choose, the money is yours to spend as you wish.

A lifetime mortgage allows you to retain full ownership of your home. The loan, typically, is only repaid when you or the last remaining applicant passes away or goes into long-term care. Usually, there are no monthly repayments to make, as the loan plus roll up of interest is repaid when the plan comes to an end.

However, should you want to, with a number of lifetime mortgages, you can make monthly interest payments.

Another option which could be available to you would be making voluntary, ad hoc repayments of up to 15 per cent of the initial amount you’ve borrowed each year.

How do I get a lifetime mortgage?

The first step is to seek advice from a qualified equity release adviser. This is a regulatory requirement to protect you.

And that’s where Key comes in. We offer honest, expert advice which will be tailored to your own unique situation.

There are several options available to you to help boost your funds in later life and equity release may be one of them. Rest assured, if equity release isn’t right for you, we will tell you.

After all, good advice is Key.

Things to consider

Our independent, specialist equity release advisers search the whole of the market to find the most suitable equity release plan for you and will discuss all the options available to you. They’ll explain that taking an equity release plan reduces the value of your estate and may affect your entitlement to means-tested benefits.

With a lifetime mortgage, the most popular form of equity release, you’ll still own your home. It’s a loan secured against your home, and is, typically, repaid when you pass away or move into long-term care. All equity release plans we recommend have a no negative equity guarantee, which means you’ll never owe more than the value of your home.

You should always think carefully before securing a loan against your home.

You have to get expert advice before releasing equity; it’s a regulatory requirement. The initial consultation is free with no obligation to proceed. If you decide to go ahead with an equity release plan, our advice fee – usually 1.99% of the amount released, subject to a minimum of £1,499 – is payable only on completion.

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