Interest Only Lifetime Mortgages

Interest Only Lifetime Mortgages

Interest only lifetime mortgages are specific forms of lifetime mortgage equity release plans. Individuals may seek an interest only lifetime mortgage as a means of free extra cash, by securing a loan against the value of their property. Individuals over 55 are eligible to arrange interest only lifetime mortgages. We have a team of specialist advisers who are dedicated in seeking suitable and cost-effective interest only lifetime mortgages for each of our clients.

Interest only lifetime mortgages offer potential borrowers the opportunity to obtain a sum of capital or income from the provider offering interest only lifetime mortgages. The borrower has the liberty to spend this newly-found capital/income on whatever they intend, for example using the money to go on vacations, or to contribute to their own financial situation. In return, the borrower must repay the full amount that was initially borrowed, yet this does not have to be repaid until the term of the arrangement comes to an end. The arrangement ends in the event of the death of the borrower, or if the borrower is occupies residency in a care home indefinately, due to declining health. As a part of the arrangement, the borrower must issue the provider with monthly expenses of interest. Interest rates may be variable or fixed, depending on the terms of the arrangement.

Interest only lifetime mortgages may be perceived as the most efficient form of equity release for many reasons. Firstly, the concluding mortgage debt will remain fixed, as long as the borrower provides all payments of interest throughout the term of the contract. As long as interest is paid every month, the borrower will be certain the equity left within the estate after they die, enabling them to make further plans for their beneficiaries. Furthermore, the borrower may be able to receive more capital or income out of interest only lifetime mortgages, in comparison to other lifetime mortgage schemes. Our specialist advisers will inform each client on the benefits, as well as the risks of interest only lifetime mortgages. They will evaluate the client’s financial circumstances to see whether it is appropriate for the client to arrange interest only lifetime mortgages.

There may be many benefits associated with interest only lifetime mortgages, yet a number of limitations may obstruct a client’s decision to arrange interest only lifetime mortgages. As monthly payments must be issued to the provider, expenditure is increased and the borrower has less to spend on their personal intentions. If interest is not paid on a monthly basis, it is free to roll up, ever increasing the entire debt of the mortgage. The limit available is likely to be a multiple of the individual’s income, which may not be sufficient to contribute to any intentions the borrower may have.

Interest only lifetime mortgages are seen as one of the most effective equity release schemes available to individuals. As well as many positive aspects associated with interest only lifetime mortgages, arranging an unnecessary scheme may result in unwanted debts and a significant reduction in the borrower’s estate. If you require more information on interest only lifetime mortgages, or require assistance in setting an appropriate scheme up, our financial advisers will guide you through the process.

Seeking interest only lifetime mortgages? Call us today.

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This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.