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    Mortgages are loans which are intended to help buyers purchase residential property. When you take out a loan, the lender charges...Read More

    You can protect yourself and your family financially by making money available, should something unexpected happen. Read More

    If you're over the age of 55, equity release offers you a way to use the value of your home to raise money. It is... Read More

    This is an area of financial planning that is often overlooked. Traditionally, we have our buildings and contents insurance with our mortgage lenders, which may be uncompetitive in a very competitive marketplace. Read More

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Related Topics
Home    Drawdown Lifetime Mortgage
  • Types of Equity Release
  • Lifetime Mortgage
  • Introduction to Equity Release
  • Home Reversion Plan
  • Home Income Plan
  • Costs

Drawdown Lifetime Mortgage

How does it work?

Similar advantages and disadvantages as a regular lifetime mortgage, with additional issues that are unique to this kind of equity release scheme. The main difference is that you don't request the full sum of money available to you immediately. Instead, you decide on a maximum amount of equity you want to release, and 'drawdown' the cash in stages as and when required.

ADVANTAGES

  1. You are in control of your money as you can release cash when it suits you , or you may be able to request a monthly income with no monthly payments to make
  2. You retain full ownership of your home
  3. You only pay interest on the amount of equity released from your home, so interest could accumulate more slowly than with a regular lifetime mortgage
  4. Drawdown Lifetime Mortgage plans may be available to younger people (aged 55+)
  5. Some Drawdown Lifetime Mortgage plans let you guarantee an inheritance for your family

DISADVANTAGES

  1. Interest rates are usually higher than on a standard lifetime mortgage
  2. Reduced amount available to leave as an inheritance
  3. Interest grows quickly as it is compounded
  4. If you want to increase the amount of equity released beyond the original amount agreed, you would normally have to apply for a further advance, which is not guaranteed
  5. If you repay the lifetime mortgage loan early, you may have to pay an early repayment charge
  6. Your tax position and certain state benefits may be affected

Equity Release, Lifetime Mortgages & Home reversion Plans will reduce the value of your estate and can affect your eligibility for means tested benefits.

How does it work?

Similar advantages and disadvantages as a regular lifetime mortgage, with additional issues that are unique to this kind of equity release scheme. The main difference is that you don't request the full sum of money available to you immediately. Instead, you decide on a maximum amount of equity you want to release, and 'drawdown' the cash in stages as and when required.

ADVANTAGES

  1. You are in control of your money as you can release cash when it suits you , or you may be able to request a monthly income with no monthly payments to make
  2. You retain full ownership of your home
  3. You only pay interest on the amount of equity released from your home, so interest could accumulate more slowly than with a regular lifetime mortgage
  4. Drawdown Lifetime Mortgage plans may be available to younger people (aged 55+)
  5. Some Drawdown Lifetime Mortgage plans let you guarantee an inheritance for your family

DISADVANTAGES

  1. Interest rates are usually higher than on a standard lifetime mortgage
  2. Reduced amount available to leave as an inheritance
  3. Interest grows quickly as it is compounded
  4. If you want to increase the amount of equity released beyond the original amount agreed, you would normally have to apply for a further advance, which is not guaranteed
  5. If you repay the lifetime mortgage loan early, you may have to pay an early repayment charge
  6. Your tax position and certain state benefits may be affected

Equity Release, Lifetime Mortgages & Home reversion Plans will reduce the value of your estate and can affect your eligibility for means tested benefits.

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Mortgage Repayment

Income Protection

Lifetime Mortgage

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Miller Financial Planning Ltd
Eastlands Court Business Centre
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Rugby
Warwickshire
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Miller Financial Planning Ltd is an appointed representative of Quilter Financial Planning Solutions Limited, which is authorised and regulated by the Financial Conduct Authority. Registered as a limited company in England & Wales No:06752854.  Registered Office: Eastlands Court Business Centre,St. Peters Road, Rugby, Warwickshire, CV21 3QP.

The Financial Conduct Authority does not regulate advice on commercial and agricultural mortgages, some buy to let mortgages, or advice on some tax matters.

The information and content within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Approver Quilter Financial Planning Solutions Limited 10/06/2024.

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