Interest-only lifetime mortgage

Advantages

• The cash you release is tax-free and can be spent as you wish, such as making home improvements, buying a new car, supplementing your retirement income and much more

• You continue to own your home, therefore benefiting from any future house price rises

• By paying the interest each month you reduce the impact of releasing equity on the size of your estate

• With some types of interest-only lifetime mortgages, you can release considerably more than would be available from a standard lifetime mortgage

• Plans can allow you to protect a percentage of your property value so that your family could inherit a part of the property value

Disadvantages

• With some type of interest-only, your home may be repossessed if you do not keep up repayments on your mortgage
  

• The amount that you will leave as an inheritance will be reduced and may affect your entitlement to state benefits as might your options for moving or selling your home in the future
  

• The amount that you will leave as an inheritance is likely to be reduced as the initial amount is still outstanding

• If you wish to pay off the equity release plan early, you may have to pay an early repayment charge (these can differ from plan to plan)

• Most interest only plans will be subject to affordability checks

• If you miss any repayments, your plan will up into a standard lifetime mortgage subject to lenders terms and conditions

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