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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.

Equity release in return for a lifetime mortgage

If you’re in two minds about whether to free up some of the wealth attached to your home, it’s important that you are aware of up-to-date and accurate information on equity release in the UK.

What is equity release?

The term ‘equity release’ can sometimes be difficult to understand, but in simple terms, it refers to the process of letting homeowners aged 55 and over release tax-free cash from the value of their home.

The amount you can release is based on your age and how much your home is worth.

You can access the money as a cash lump sum at the outset or as a facility to access on an “as and when” basis at any time in the future.

The most popular type of equity release is a lifetime mortgage.

Lifetime mortgage

There are many positives to applying for a lifetime mortgage, such as:

●      You can take out a lump sum of tax-free cash in one go

●      You have the freedom to spend this money however you want

●      Releasing equity with a lifetime mortgage means you don’t need to move out of your home or downsize

●      There’ll be nothing to repay until you die or move into full-time care

Is now a good time?

If you are considering taking out a lifetime mortgage, now could be a good time to enquire, as mortgage lenders are slowly starting to reduce their interest rates following the spike in interest rates post the mini budget in September 2022.

The current average lifetime fixed mortgage interest rate as of December 2022 is between 6-7%, depending on the lender.

The highest rate seen in November 2022 was 8.95%, illustrating a significant drop in the space of just a month, with experts predicting the pricing of fixed mortgage interest rates to continue to stabilise throughout 2023

The interest rate you will be offered will depend on different factors, such as your age, the level of your requested loan in relation to the value of your home and other features included in your plan.

Considering a lifetime mortgage? Our qualified equity release advisor Joanne can help you find lenders with good interest rates.

Contact us to see how we can help.

The Equity Release Market is constantly evolving. Providers of equity release products are continually innovating to create flexible lifetime mortgages and other products to suit clients in a variety of financial and personal circumstances.

Following the growth in popularity of equity release products in 2021, approximately 20,000 new customers have already unlocked wealth in their properties in the first quarter of this year.

Piles of coins with small model houses on top

How are Lifetime Mortgages adapting?

The Equity Release Council confirmed this week there are now 665 mortgage products available in the marketplace which is an increase of 65.8% from 401 products in just 2 years since 2020 as lenders continue to provide more flexibility and innovative features to provide a better solution for more customer circumstances.

One provider has just launched a new lifetime mortgage with early repayment charges that only last for the first 5 years, making the product more reflective of a standard mortgage with an unsurpassed increase in potential LTV ratio of 60.7% for those clients looking for the maximum cash release (subject to age)

How can we help?

The explosion of new products to the Equity Release Marketplace can feel overwhelming for prospective customers. By working with North East Equity Release, we can help take the stress and anxiety out of finding the right product for you.

We will take the time to research the whole of the market and assess the features, benefits, drawbacks and penalties involved in every Lifetime Mortgage product.

Whether your priority is inheritance protection or you are concerned about early repayment charges, future home moves, interest rates or how equity release could affect your state benefits, we have the answers to your most pressing questions.

Elderly couple high-fiving while holding documents.

Remember that with any Lifetime Mortgage product, you’ll always keep your home until you move into long-term care or pass away.

If you’re interested in learning more about Flexible Lifetime Mortgages, don’t hesitate to get in touch. We offer a free, no obligation consultation, free of any unnecessary jargon.