24 April 2014
Equity Release
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Who Offers The Best Lifetime Mortgage?

Lifetime mortgages have now become the most popular type of equity release scheme. They are defined as mortgages where people over the age of 55 can release cash through the value of the equity within their main residence.

Customers can look for the best lifetime mortgage to suit their lifestyles depending on their financial objectives and attitude towards how much they wish to leave as an inheritance.

The best lifetime mortgage is comprised of either roll-up schemes or the interest only lifetime mortgage versions. You need to assess these factors in conjunction with features of your lifestyle such as your income per year and your retirement strategy. The elements that make the best lifetime mortgage include:

Low interest rates: Many customers look for low interest rates because this allows people to benefit more from lifetime mortgages. This also makes the financial hit of paying it back later less of a burden in case you fall ill, for example or go into care. Advisers agree that interest rates can also fluctuate but on the whole, some of the low interest rate providers include Stonehaven Equity Release and Aviva. These lifetime mortgage lenders have interest rates which are currently sub 6%.

Flexibility in a scheme: As people become older, retirement planning needs to be built around flexibility to take into account the changes in someone’s life. Hodge Lifetime provides one of best lifetime mortgage schemes as their flexible lifetime mortgage allows 10% repayments each year of the original capital borrowed. This can therefore work in the sense it is a capital and repayment lifetime mortgage. For those who do not like the compounding effect of interest, the Hodge Lifetime plan could prove to be one of the best lifetime mortgage plans.

Drawdown facility: Lifetime mortgage providers can give drawdown facilities that can be large or small depending upon your age and the valuation of your property. Aviva, Just Retirement and LV are all companies that offer drawdown facilities on their equity release loans. How this works is that an initial lump sum is taken with any amount NOT taken then is held in reserve to be withdrawn at a later date, if required. This cash can be withdrawn over a period of time, however, the interest is ‘rolled up’ into a final amount that is eventually repaid upon death or moving into long term care. The major advantage of drawdown schemes is that the interest is not charged on the reserve facility that you have not taken out. This shows how economical and one of the best lifetime mortgage schemes can be.

Early repayment charges: People who are planning to choose lifetime mortgages know that there can be some early repayment charges that need to be paid if the equity release loan is repaid early. If you want to take care of your personal finances when you are in retirement, you should have a list of providers who offer affordable early repayment charges. The good news is some lenders do not charge early repayment charges under certain circumstances and specific terms. To ascertain which lenders offer the most competitive early repayment charges, then you should consult with a specialist equity release provider who must offer independent advice on the subject.

By looking at all these features of a lifetime mortgage, you can then decide whether lifetime mortgages are right for you in retirement. If you need to find the best lifetime mortgage then one broker who can source the whole of the equity release market is Equity Release Supermarket on 0800 678 5159.

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