Key advantages of a interest-payment lifetime mortgage

  • Making interest repayments means that you only repay the initial amount borrowed when your plan ends.
  •  Monthly interest repayments can be fixed for life.
  • If you decide that you no longer want to make monthly repayments, some lenders may allow you to stop payments with no risk of losing your home and move to a lumpsum lifetime mortgage.

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The Risks

  • Any lifetime mortgage will reduce the amount of inheritance you leave for your loved ones, so we encourage you to involve them in the process.
  • You may incur penalties if you pay your interest-only mortgage off early.
  • If you choose a variable interest rate, your monthly repayments could increase if interest rates rise.

Safeguarding your future

With all lifetime mortgage plans, you will always retain 100% ownership of your home. And the ‘negative equity guarantee’ means that even if the value of your property decreases, you will never owe more than you borrowed or pass debt on to your family.

How an interest-payment lifetime mortgage works

If you’re concerned about the amount of interest that accrues on a lifetime mortgage, then an interest-payment plan could be the right choice for you. This is a popular option for people who can commit to making a monthly payment for the duration of the plan. Instead of paying back interest at the end of the loan term, only the amount that was borrowed will need to be repaid. This means that you unlock the most equity out of your property as possible and leave more inheritance for your loved ones.

Eligibility for this type of loan is the similar to a standard lifetime mortgage, however you will be required to discuss your income and expenditure with your adviser to confirm affordability.

Repayment options

An interest-payment lifetime mortgage plan gives you flexibility and choice. You agree a monthly repayment with the lender, that could cover all or a portion of the interest. If you choose to pay only a portion, then the rest of the interest will accrue and be paid at the end of the loan period.

Payments are taken by direct debit each month, so you don’t have to worry about missing the date.

 

How we help

It is a regulatory requirement that you take advice from a qualified equity release advisor for a lifetime mortgage.

Once you contact us, you will be assigned a personal advisor who will work for you throughout the entire process. Their role is to give you unbiased, professional advice and help you get the very best deal for your circumstances. They will help you decide if an interest-payment plan is the best option for you, and help you work out the most affordable repayments while ensuring that you protect any inheritance you wish to pass on.

Advice is always tailored to your unique circumstances.

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One of our advisors would be happy to have a friendly, no-obligation chat to answer any questions you might have.

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