An interest only lifetime mortgage could allow you to release a cash lump sum from the mortgage on your home in a cost-effective way, because as long as you keep up with the interest payments, the amount you owe never increases.
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An interest only lifetime mortgage is an attractive option, when it comes to alternative lifetime mortgages because it allows you to release equity and reduce the interest.
You can choose to pay off some, if not all, of the interest during the term of your loan. This allows you to future proof the inheritance you leave too.
Interest only mortgages tend to follow the same set of principles as standard lifetime mortgages; the minimum age is 55 and the loan to value (LTV) is based on the youngest applicant as well as the market value of your property.
The amount of equity released tends to increase with the age of the homeowners and their life expectancy.
The level of interest repaid back to the lender can be determined by the homeowner, depending on factors like pension income, inheritance and the size of the loan.
You are free to select your level of contribution, in terms of repayments.
If the contribution level towards your interest only lifetime mortgage is lower than the interest charged, it will begin to add up.
However, the most popular option is to fully repay the interest each month, in order to maintain a static mortgage balance.
Previously, retirees have found it difficult to secure additional finance due to their age and income. Lifetime mortgages, however, paved the way with equity release plans where age is no barrier. By assessing each individual circumstance, and using a thoughtful lending approach with flexibility, we can offer plans to suit your retirement goals.
Interest only lifetime mortgages do not suit everybody. Individual circumstances play a huge part on whether an interest only lifetime mortgage is the best option for you as releasing equity can affect your tax position and entitlement to benefits, and the amount of inheritance you might leave.
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