For those over 55, Lifetime Mortgages offer what is probably the greatest level of flexibility, including:
• Option to make no payments at all
• Option to make payments of interest regularly, or when you choose to do so
• Almost any past adverse credit can be considered
• There is no fixed term for the mortgage. It can last for life (or until the owner goes into care).
• There is a guarantee of no Negative Equity. So even if you choose to make no payments, the amount that has to be repaid at the end can never exceed the sale price of the property on the open market, regardless of how many years you have had the mortgage.
• You can take the maximum amount from the mortgage at the start, or take some to start with and have a reserve facility for drawing more when needed.
• You can use a Lifetime Mortgage to re-mortgage an existing property or to buy a new one.
• No income requirements or affordability calculations at all – the borrowing is based solely on the property value and the age of the borrower (note: where there are two borrowers on the mortgage, the lenders will use the age of the younger).
Here are examples of what the maximum borrowing could be currently (assuming a property value of £300,000):
Age 55 25% of value £76,000
Age 60 32% of value £97,000
Age 65 37% of value £112,000
Age 70 42% of value £127,000
Age 75 48% of value £144,000
Age 80 52% of value £156,000
(Note: there cannot be another mortgage on the property along with a Lifetime Mortgage so any existing mortgage must be paid off.)
Note: There are also options to have a Lifetime Mortgage on a rental property and on properties of unusual construction. However, the percentage of borrowing for a Lifetime Mortgage on a rental property is much less than that shown above.
