What is a Mandatory Payment Lifetime Mortgage?
A Lifetime Mortgage is a form of equity release which allows you to release some of the value tied up in your home as a tax-free cash lump sum which can be used for most purposes from repaying an interest-only mortgage, helping with your daily cost of living to home improvements, buying a new car, or funding a holiday.
As property wealth becomes an integral part of later life financial planning, innovation is at the forefront of the lifetime mortgage sector with lenders constantly striving to give customers access to a broad range of products that better suit their specific needs and ideally bridge the gap between a lifetime mortgage and a standard mortgage.
And now … a revolutionary new mandatory payment lifetime mortgage has just been launched by Legal and General which they have named their “Payment Term Lifetime Mortgage”.
In essence, the Payment Term Lifetime Mortgage essentially fills the gap for a smaller, although still significant number of homeowners who are looking at lifetime mortgages but were either under 55 years old or needed a higher level of borrowing than available.
The basic concept is that mandatory payments are required for a set number of years before the mortgage reverts to a rolled-up basis, which differs significantly from other forms of lifetime mortgage by being available to customers from age 50 and allowing an increased level of borrowing if required.
For Equity Release Mortgage advice in Newcastle and the surrounding areas, we can help guide you through the process.
Interest Serviced Equity Release Explained
Equity release takes several forms, with lifetime mortgages being one of the most popular. If you own your home and are aged 55 or over, you can use a lifetime mortgage to release some equity from your home.
With a lifetime mortgage, you have the option to not pay back any of the interest accrued until you move into long-term care or pass away, although many people do choose to pay some or all of the interest each month to mitigate the effect of compounded interest on the equity in their home.
To recognise, reward and encourage customers to service some of their interest, another recent product innovation introduced by Standard Life and More 2 Life and other lenders already committing to following suit… is the option to secure a lower fixed interest rate for customers who are willing and able to commit to making voluntary payments towards the monthly interest for an agreed period of time.
Get in Touch
At North East Equity Release, we offer friendly, expert advice on all aspects of lifetime mortgages from standard roll up, to voluntary serviced interest and now mandatory payment lifetime mortgages in Newcastle and the surrounding areas.
With so many different products to consider, it is natural to have many questions about which equity release mortgage is right for you.
We are here to answer all of your questions to help you make an informed decision and provide you with expert advice and guidance as to which product is best for your needs.
For all later-life mortgage advice, we can hold appointments over the phone or in the comfort of your home.
