Latest Equity Release News & Insights

Two pieces of information are used for the equity release calculation, your age and the value of your home. It seems pretty straightforward and easy to enter correct data and receive an accurate result; however, there are actually a lot of factors that can hinder accuracy when using an equity release calculator on your own.

Age of the Youngest
An example of how someone can skew their results when using a calculator is the age you provide the calculator. The calculator does not have any idea how old each person in your home is. It has no way of knowing if the age you input is the one the equity release company is going to use.

• The youngest homeowner must be age 55 for lifetime mortgages and age 65 for home reversion plans.

A homeowner is defined by the property title. If the person is not in the property title and cannot sign for a loan, they do not qualify as part of the new loan; therefore, the youngest person on the property title is the person’s age you need to use in the calculator. Many consumers do not know this and may use their own age which could be older than the youngest person by a few years.

The calculator shows the results based on age and home value, thus if the age is not the one the equity release company will use, the results can show a larger maximum amount for the tax free lump sum than is actually going to be provided.

Valuing your Home
Did you hire an appraiser to tell you the value of your home? When you conduct online research for equity release schemes you probably are not ready to spend the money it takes for an appraisal. Plus there are equity release companies willing to offer free valuations. This means the number you use as the home value may be inaccurate in the current market.

Factors that apply include changes in the stability of the economy, particularly in the housing market where houses can start to appreciate. Recessions depreciate home values, which is why it turns into a select buyers’ market. A sellers’ market is where you have the upper hand because demand for your home drives the price up.

The more value in your home the more you can get released from equity. In your equity release calculation if you based the number of an appraisal you had when you bought the home 30 years ago the result will be skewed. You may find you could get double what your home was worth 30 years ago.

There are ways around this situation though. Nationwide offers an online tool that takes an old valuation, your home’s location, and will provide you with an estimate of its current value. Zoopla is also an option as you can find out about properties that have recently sold, pending sales, and homes on the market. By finding a comparable house in size and style in your area you can use their sale price as the home value.

But you are working off of an estimation, which means the results are an estimation: a guide and not to be used as a set in stone amount.

Brokers Narrow it Down
With equity release calculator results used as a guide, you will want to speak with an independent broker who is qualified and properly regulated. They can offer you the best products on the market for your situation by taking your information. You saved yourself some time in learning if it is possible to release some equity from your home. Now you need an experienced person to help you narrow down the best equity release for your needs.

They can do this by asking more pointed questions than the simple online equity release calculator. For example, if you have had ill health you may be asked to fill out a health and lifestyle questionnaire that would lead to a larger maximum amount available to you.

They may steer you more towards the drawdown mortgage if you have few expenses in the first 12 months of taking out the release in order to preserve funds for further into your retirement. It all starts with the equity release calculation and moves on from there. Armed with your guide as a cash sum number, you can decide if you want to take less, find a different product, or simply downsize to avoid lifetime mortgage products.

Aug

Is an Equity Release Calculator the Same as an Equity Calculator?

Categories: Equity Release

Tags: Equity, Equity Calculator, Equity Loans, Equity Release, Equity Release Calculator, Equity Release Products, Equity Release Schemes, Equity Release Schemes Calculator, Home Reversion, Interest Only Lifetime Mortgage, Interest Repayment, Lifetime mortgages, Long Term Care, Residential Mortgages, Secured Loans, Types of Loans

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There are numerous types of calculators available online to help you get answers to your questions including options for mortgages and equity release products. There are always going to be distinct differences when it comes to how these various calculators work, so you need to be clear on what they do and whether they are the same because the names are similar or not. In the case of an equity release calculator and equity calculator, you have two different types of calculators designed to give you two different answers, even when the names or keywords sound the same. In fact, you might run into a site that uses both phrases only to find out there is just one type of calculator available to you.

Unfortunately, some websites are misleading in order to get all consumers to visit, and most particularly those that can use their products. It is a long story but basically it goes back to the original concept of marketing for consumers with the new Internet. Now we are more refined and get into niches to ensure proper targeting. As long as you keep this in mind, you can search properly for exactly what you want.

Equity Release
An equity release calculator is specifically designed to target lifetime mortgages and home reversion. It is for individuals who are over 55. This is because the market for these equity releases is for those who are over 55 and heading into or already in retirement. These products provide money to supplement what used to be incoming from a job. It keeps you in the lifestyle you enjoy without making major changes.

Equity
An equity calculator is for residential mortgages, secured loans, and similar products designed more for individuals who are under the age of 55. As long as you have a steady income and can prove the income, you are able to get these types of loans. In recent years certain mortgages like interest only have not been offered above certain ages such as 65 because they are due to be paid at 75, when the person will be in retirement and may not have the funds to make the monthly repayments of interest. This is also different from the interest only lifetime mortgage which allows for interest repayment, but has the cap of a lifetime for the individual. Again, lifetime mortgages are for those aged 55 and over versus the interest only product that is not.

Understanding the Differences
Now that you know the calculators are for different age groups, it is possible to discuss the generic details of each in more context. An equity release schemes calculator is designed to use your age and the home value to tell you a maximum allowable lump sum. The older you are, the more money you can unlock from your home’s equity. This is on the assumption the money will be paid back sooner because you are closer to your death or needing long term care in a facility, versus living in the home. The more value in the home, the more you can obtain in a loan as well. Equity release works on the concept of loan to value percentage, where you get a certain per cent of the home based on the accrual of compounding interest over your expected lifetime.

With standard mortgages for the under 55s, mortgages are set on a fixed term. For interest only it is usually 10 years, where the principle balance must be paid in a balloon payment at the end of those 10 years. The interest is paid monthly. A 30 year fixed loan obviously has all payments in by the 30 year mark, although many refinance and thus extend the terms for another 30 years. The point is you are making payments throughout the mortgage as a means of dwindling the amount owed at the end.

With equity release you are not, so you pay interest in full plus the capital sum in full at the very end. It makes for one very large payment. The calculator for simple equity loans has to account for the length of term you will have the loan for such as 10, 15, 20, 25 or 30 years. It also accounts for the value of the property based on the amount you need to get the loan and pay for the property or to take equity out. You can usually release up to 85% although sometimes only 75%. Thus when you look for an equity release calculator you do not want an equity calculator to give you results and vice versa.

Jul

A Retired Family Member can be the Solution!

Categories: Equity Release

Tags: Advantage of Equity Release, Cost of Living, Drawback to Equity Release, Equity Release Agreement, Equity Release Plan, Equity Release Provider, Equity Release Schemes, Lifetime Mortgage Payment, London, Release Equity

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The current state of the economy and its effects on the cost of living are broadcasted on a daily basis in the newspaper, on television, on the radio and on the internet. Today, people are having a difficult time securing their future. It is no longer easy to obtain a property or to pay the rising tuition fees. If you are retired you have less potential of finding help in the mainstream market, but there is a solution under equity release schemes.

Retired Family Are the Solution
During these difficult times of economic instability, retired family members can be the solution to the problems of many families. If a retired family member is the owner of a property, he or she can enter into an agreement with an equity release provider. This agreement will allow he or she to release money tied up in their property. This money is tax free and can be obtained as a fixed source of income or as a lump sum amount.

Qualification Measures to Meet
In order to enter into an equity release agreement, a retired family member needs to qualify for equity release. He or she must be no younger than fifty-five years and no older than ninety-five years. He or she must be the owner of the property which must have a value of at least seventy thousand pounds. The property from which he or she hopes to release equity must the permanent residence meaning that he or she lives in the property for at least six months each year. Only if a retired family member is able to meet these requirements will he or she be able to benefit from equity release schemes.

Advantages of Helping
The advantage of equity release is that the retired family member does not need to make any sacrifices in order to help his or her family. He will be able to continue living in his or her home for as long as he or she wants to or for as long as he or she is able to. He or she will also not be required to make any repayments unless he or she chooses for an equity release plan that requires a monthly repayment.

The money obtained from the equity release provider can be used by the retired family member to help his or her children or grandchildren purchase a property of their own or to pay for their education. Even the daily costs of living can be covered by the equity released from the property.

Disadvantages of Helping
While there are not many reasons you would not want to help out your family it should be considered a give and take situation. If you take out equity now then there is nothing later for your family once you are gone. The money for their inheritance is used now. For many it is better to use it when it is most needed rather than having to wait until the very end when the situation could be much worse.

Keep in mind that if your home has been passed down through generations already then using an equity release puts it in jeopardy. You may want to consider other options so that the home will not have to be sold. There is at least one option in that you have a life insurance policy that can cover the full lifetime mortgage payment. In this way the house remains. Also ask an independent adviser about the different clauses you can use to protect the house, inheritance, and ensure a good deal is made in your favour because it is possible to find the product that best suits you.

The Silver Lining
While there is a drawback to equity release in terms of inheritance there is also a small glimmer of hope that something might be left. While the home will not be kept since it is used for the repayment, you can focus on the valuation fluctuations that happen in the market. Right now the news has been pretty bad for financial products, but things are certainly looking up. The second recession is definitely over and London is seeing increases in property value. This also means that your property throughout the UK is on the rise in value. As property value increases again, so does the potential amount left for inheritance.

Ask about equity release schemes to find out how your retirement can still be a great help to your family members. Also consider how your retirement can be easier on you with such products.

Feb

Is it Necessary to Compare Equity Release Schemes?

Categories: Equity Release

Tags: Compare Equity Release, Compare Equity Release Products, Compare Equity Release Schemes, Equity Products, Equity Release Experts, Equity Release Products, Equity Release Schemes, Home Reversion Plans, Interest Rate, Lifetime mortgages

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Everybody wants to lead a comfortable life in terms of finances after they have retired. But, very few people can transform this dream into reality because of the increase in the price of various commodities. Retired people often struggle to make ends meet with the meagre sum of money that their pension amount offers. Equity release schemes are a wonderful way with which retired people can supplement their income. But, it is imperative to compare equity release schemes before contacting a lending agency, so that you can avail a good deal in the market.

Economic changes determine how well retirement will go. You understand that inflation can raise rates. Struggling economies can take away some of your invested funds. It all comes back to needing some way to supplement this income and for those lucky enough to own a home you have options. As long as you own your home free and clear comparing different equity products on the market is your best way to determine if you have cash you can access.

One needs to collect information about the various schemes that are available for equity release, so that they can analyse the plans which will offer them a viable deal. Interest rate is a very important factor which tends to help people to pick a particular equity release scheme. In most of the schemes, the rate of interest generally remains fixed, but it is still advisable to clarify all your doubts with the lender as well as to compare equity release products.

The interest rate is only charged to people who opt for lifetime mortgages. With home reversion plans, one does not need to worry about the interest rates because the lenders have legal ownership over the property portion that has been sold off. In terms of repayment for lifetime mortgages, people to have to pay an additional charge if they wish to pay off the loan early, but in home reversion plans there is no opportunity for paying off the loan.

The opportunity that does not exist in home reversion is due to no loan. If you have no loan then you have nothing to pay off. The money given to you under home reversion is for the exchange of a product, in this case your home. You sell a portion of your home, but retain partial ownership. With this method your family will lose the opportunity to keep the home unless they can pay full value for the home. It is rare that someone can pay full value for the home or the part sold in home reversion, but you do have that option.

With lifetime mortgages, homeowners can have legal ownership over their property and if they can repay back the loan then the rights can get transferred to their estate. But in the case of home reversion plans, homeowners cannot exercise the option of inheritance for their children in terms of the house. Home reversion allows for inheritance in cash form. Since you sell the property but not all of the property, any part that is left is sold to the provider. The provider gives the cash to your beneficiaries and there is the inheritance. If you sell the entire estate before you pass on or move to a new location and use up that cash you attained then inheritance is not an option. Just remember in this kind of scheme it depends on how you use the money as to whether there is inheritance left.

Many lifetime mortgages that you compare will have no option for inheritance. This is because the interest adds up sucking away the cash available on the sale of the home. The only way to get inheritance with lifetime mortgages is for your children to repay the loan in full.

Based on your requirements, you need to choose equity release schemes that work for you. One can also get the help of equity release experts about the various schemes that are available in the market and then decide which plan can give them the maximum amount of benefit. People often commit the blunder of taking the plunge with a particular equity release scheme without gauging its pros and cons, and eventually they might have to regret their decision. Therefore, it is extremely necessary to assess the market scenario and choose your equity release scheme with care. Compare equity release schemes appropriately to avoid making a mistake. Check out all your options and ensure your family is aware of the choice you are about to make.

Feb

How Stonehaven Can Help the Over 55s Climb Up the Property Ladder

Categories: Equity Release

Tags: Conventional Mortgage, Drawdown Lifetime Mortgages, Equity Release Advisers, Equity Release Plans, Equity Release Process, Interest Only Lifetime Mortgage, Interest Only Mortgage, Interest Select Plans, Interest Select Products, Residential Mortgage, Stonehaven, Stonehaven Equity Release, Stonehaven Equity Release Plan, Stonehaven Products, Type of Release Scheme

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Life tends to be a bit harder financially for those who are aged over fifty-five. Based on the fact that they are nearing their retirement and may even be no longer a part of the active workforce, fewer opportunities are made available to them. This is especially true where loans and mortgages are concerned. It is very difficult for those who are over fifty-five to obtain a mortgage or similar finance that will need to stretch into their retirement. However, there is a new breed of financial companies such as Stonehaven who are working hard to change this.

The equity release plans offered by Stonehaven are all geared at helping those who are over fifty-five years old to release equity that is constrained within their property. The equity release process is quite simple to understand. When you own a property, it has a certain value to it. That value can literally turn into tax free cash, which you can spend to meet any need or want.

Many of the older population feel that their age is against them under many circumstances and that can be quite true. There are things that they want to do but cannot because they cannot obtain the finance assistance that they need to do so. Also, when they want to move from one home to the next, they may have difficulties obtaining the necessary finances to do so. But, with the range of equity release plans offered by Stonehaven, particularly the interest only lifetime mortgage range called the Interest Select Plans, they can potentially make all of their dreams and wishes come true.

A most attractive equity release plan offered by Stonehaven is the Interest Select Plan – Lite, which is an example of an interest only lifetime mortgage with a fixed interest rate of just 5.99%. The Interest Select Plan is an interest only lifetime mortgage, hence it will run for the remaining duration of one’s life and the interest charged will always remain the same.

The fact is that Stonehaven’s range of Interest Select Products can bridge any mortgage shortfall like a conventional mortgage would. It is also geared towards your current age nearing retirement making it easier to plan for some fun in life.

Hence, if looking to purchase a new house and need the funds to complete the purchase, you could apply for a Stonehaven equity release plan to bridge the shortfall in money. It therefore acts in exactly the same way as a residential mortgage – but this is for the over 55’s and runs throughout their retirement with NO proof of income necessary.

Many people think equity release is always completed on the house they are currently living in. This is quite correct; however, there are other instances when it can also be used to move up the property ladder.

If someone lives in an unencumbered property with no outstanding finance secured upon it and now wishes to buy a more expensive house, how could they achieve this goal? Simple. They apply for the Stonehaven equity release on the property they are buying to cover the amount they need to put towards the sales proceeds of their existing house. Both the equity release and the sale proceeds added together will give the sum of money to buy the new and more expensive property.

You do not have to enter into a complicated scheme like increasing your property size. You can also reduce your property size and keep the interest only mortgage with you. You downsize, have a lower value in the property, but money from the sale of the property you had can cover much of the mortgage, interest, and perhaps leave an inheritance. It all depends on your situation. You may find things work out best with a different type of release scheme than interest-only.

If is all dependent on the funds you have on a monthly basis. For some they do not have disposable income, which can take away some advantages through Stonehaven. Of course there are other options like drawdown lifetime mortgages that give you a sum to draw on when you require money.

If you wish to discuss further how equity release schemes can move you UP the property ladder in retirement call 0800 678 5159 and talk to independent equity release advisers who specialise in the range of Stonehaven products. It is often best to speak with an adviser to make certain you understand what you are getting into and all the ins and outs.

Nov

What is the Maximum Equity Release I Can Raise?

Categories: Equity Release

Tags: Conventional Mortgage, Draw Down Schemes, Enhanced Plans, Equity Release, Equity Release Calculators, Equity Release Schemes, Home Reversion, Home Reversion Plan, Joint Applications, Lifetime Mortgage Scheme, Lifetime mortgages, Lifetime Residency, Maximum Equity Release, Types of Plans, What is the Maximum Equity Release I Can Raise?

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Equity release is now one of the most popular methods of raising a cash lump sum. The schemes allow people aged over fifty five to leverage the equity in their home to raise cash through a lifetime mortgage scheme or home reversion plan. The initial concern of most people is “what is the maximum equity release”, and while this is an important factor, it should not be your only deciding concern.

What is the Maximum Equity Release Available?

In order to understand what is the maximum equity release available, you will need to be aware of how the lender assesses an application. Equity release schemes can be divided into two different types of plans and each will have different criteria.

Lifetime mortgages: These schemes are similar to a conventional mortgage with the exception that there is no monthly payment needed. Instead the interest on the loan is compounded onto the loan balance each year. For this reason, the amount of loan available is dependent on factors such as your age, gender and medical health.
Home reversion: This type of plan is less common and allows home owners to sell all or a part of their home while retaining the right of lifetime residency. These schemes are only available to people aged over sixty five.

Calculating what is the Maximum Equity Release

Calculating what is the maximum equity release is dependent on a number of qualification criteria. Generally, those people who are older will be offered a greater percentage of equity release. Most people will be offered between thirty and fifty percent of the value of their home as a maximum equity release sum. However, this is dependent on a number of other variables.

There are a number of equity release calculators which have been pre-programmed to determine what is the maximum equity release for the specific circumstances of each individual. These are online and free tools which require you to answer questions about yourself and your property. The calculator will then apply this information to a set formula to determine if you qualify and what is the maximum equity release available to you.

Factors Affecting the Maximum Equity Release

There are a number of factors considered by equity release lenders. These include:

The value of your home: This is used together with the balance of any existing secured loans or mortgage to determine the amount of equity which is available to release. There is a specific loan to value ratio used by the lender to determine eligibility. The lender will also consider how much interest is likely to accrue and ensure that there is sufficient equity to cover this and the initial release sum. This is why equity release sums are restricted to approximately fifty percent of the value, since the compound interest has the potential to double the balance of the loan approximately every eleven years.
Your age: This information in addition to your gender is used to calculate your potential lifespan and therefore the anticipated duration of the loan. Older people are offered a higher percentage of release as they are deemed to have a shorter lifespan than someone younger. Gender is also a factor since the national averages show that men have a shorter expected lifespan than women.
Your health: Some schemes will also consider your health. There are enhanced plans offered to those with a serious or terminal medical condition which allow a higher rate of equity release due to the impaired expected lifespan of the applicant.
The other applicant: In joint applications, the other applicant will also have a dramatic impact on the maximum sum offered. Joint applications are usually based on the information of the youngest applicant since it is estimated that they would outlive their partner. Since equity release offers lifetime residency, even if one party passes away, the other party is still entitled to live in the home for the remainder of their lifetime. Both parties must meet the minimum age criteria of fifty five in order to be eligible.

If you are interested in equity release, what is the maximum equity release sum, is bound to be a question you have already asked. However, it should not be the only deciding factor. In some cases, it may be more beneficial to take a smaller sum or investigate the possibility of draw down schemes which offer an initial sum with a draw down facility if it is required later. This could save you a great deal in the long term in interest payments. It is always worth discussing your options with a specialist adviser who can assist you in assessing the advantages and disadvantages of specific schemes and help you in moving forward.

Nov

What is Equity Release: Understanding the Basics

Categories: Equity Release

Tags: Conventional Mortgage, Enhanced Plans, Equity Release, Equity Release Calculator, Equity Release Funds, Equity Release Qualification Criteria, Equity Release Schemes, Joint Applications, Long Term Care, What is an Equity Release Calculator?, What is Equity Release, What is Equity Release Qualification Criteria?, What is Equity Release Used for?

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Many retired people have heard the term equity release, but a great number are unfamiliar with the financial concept. In order to understand what is equity release, you will need to be aware of the basic principles.

What is Equity Release?

Equity release is an umbrella term for a number of financial products. Equity release schemes are designed to allow people aged over fifty five to release the equity which is tied up in their home. The home owner can borrow against the value of their property, but unlike a conventional mortgage or secured loan there is no monthly payment or fixed term.

Equity release schemes are designed to be in place for the remainder of your lifetime. Since there are no repayments, the interest accrued is compounded on the balance of the loan. This balance is only due for repayment if the home owner goes into long term care or when they pass away. At this point, the home is sold and the proceeds used to repay the balance. Any remaining monies are distributed to the estate beneficiaries as normal.

What is Equity Release Used for?

Equity release schemes offer a lump sum, additional income or a combination of both. These funds are tax free and can be used for any purpose. Many people use equity release funds to supplement their pension, improve their home, take a holiday of a lifetime, purchase a holiday home or even plan their estate.

The funds from equity release can be spent, invested or given away. Many retired people may not have the liquid assets to assist their family but have a great deal of equity tied up in their home. With the current economic climate, many pensioners are using equity release to supplement their income and assist their children or grandchildren to purchase their own house. Since equity release schemes guarantee the right to reside in their home for the rest of their lives, this can be achieved without compromising their own home.

What is Equity Release Qualification Criteria?

Since equity release schemes are a little more complex than a conventional mortgage or secured loan, the qualification criteria is a little more detailed. There is a minimum age restriction of fifty five and the property must have a market value of at least £50,000. The amount of release offered can vary from thirty to fifty per cent of the value of the property. This will depend on a number of factors including your age and gender, the value of your home, the balance of any mortgage and in some cases your medical health status.

In order to determine the potential duration of the scheme, the lender will need to estimate your anticipated life expectancy. The longer the potential duration of the loan, the smaller the amount that will be offered initially. For example, a woman aged fifty five is going to be offered a far smaller percentage of equity release than a man aged eighty. This is because it is almost certain that the woman will outlive the man. In cases of joint applications, the age of the younger party is used for the calculation. Some lenders do offer enhanced plans which offer larger release percentages based on life impairing conditions. For example, if you have a severe condition which will compromise your life expectancy, they will offer you a larger sum than someone with the same qualification criteria who is in perfect health.

What is an Equity Release Calculator?

Simply because the qualification criteria can be a little complex, there are a number of online tools called equity release calculators. These tools are free to use and take the information you supply and apply it to a formula set by the lender. This will determine whether you are eligible for equity release and the equity release sum which would apply to your circumstances. These tools are confidential and allow home owners to research their options in the comfort of their own home without feeling any sales pressure. It is recommended that in order to gauge the market place fully, you make use of several different equity release calculators. This will enable you to gain a good perspective of the schemes which are available and suited to your circumstances. This can enable you to have the information necessary to make an informed choice about proceeding further and seeking out professional advice.

If you are interested in what is equity release and whether it would meet your financial requirements, it is worth taking a little time to research your options. There are numerous online calculator tools available and a number of brokers and advisers who specialise in equity release, offering impartial advice. Equity release can be a great financial solution for many retired people, but it is important to understand the basics and any restrictions or limitations which may apply. This will help you to proceed, confident that it is the right choice.

Oct

The Many Forms of Lifetime Mortgages

Categories: Equity Release, Lifetime Mortgage

Tags: Drawdown Lifetime Mortgage, Enhanced Lifetime Mortgage, Enhanced Lifetime Mortgage Plan, Equity, Equity Release, Equity Release Schemes, Financial Advisor, Fixed Repayment Lifetime Mortgage, Fixed Repayment Lifetime Mortgage Plan, Home Care, Interest Only, Interest Only Lifetime, Interest Only Lifetime Mortgage, Lifetime Mortgage, Lifetime Mortgage Plans, Lifetime Mortgage Scheme, Loans, Lump sum, Regular Income, Reserve Facility, Tax Free Lump Sum

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Lifetime mortgages are probably the most popular equity release schemes. These are loans that home owners take against their properties. The loans, or equities, are usually paid in tax free lump sums or regular income depending on one’s preference. The home owner need not pay anything. The loan amount, which includes the interest, is recovered by selling the property once the owner dies or moves into home care permanently. There are several forms of the lifetime mortgage plans that are open to people who are 55 years and above.

Enhanced lifetime mortgage plan is available to all seniors who suffer from life threatening conditions or lifestyles. In this scheme, one produces evidence of such ailments as heart condition, hypertension, cancer, or any other condition that can considerably shorten the life expectancy. The assumption that one will receive the equity release over a shorter period raises the lump sum payable to the ailing home owner.

Drawdown lifetime mortgage is another option. In this plan, one is entitled to a specific amount, depending on the value of the house and a few other factors, which can be paid in lump sum or as steady income. However, the home owner only pays interest on the amount he receives, and the rest is put in the reserve facility. The amount in reserve does not attract any interest.

In the interest only lifetime mortgage, the home owner chooses to pay back only the interest on a monthly basis. The plan allows the borrower to decide the percentage of the interest s/he wishes to pay. It also allows you to switch to another plan should you find the monthly payments financially demanding. The good thing about this plan is that the amount the home owner owes the lender does not increase with time since the interest is offset every month.

In a fixed repayment lifetime mortgage plan, the home owner receives an interest-free lump sum. However, one is required to pay to the lender a predetermined amount of money once the property is sold. In this plan, you can keep the property as long as you want, so long as you pay back the agreed amount once you sell it.

The type of lifetime mortgage scheme you choose should be tailored to fit your current financial situation and plans. It is, therefore, advisable to talk to a financial advisor to determine which plan suits you.