Key advantages of a protected lifetime mortgage
- You have peace of mind knowing that your loved one’s inheritance will be protected.
- You can choose to pay some or all of the interest over the course of the loan, leaving more money to leave as an inheritance.
- A ‘no negative equity guarantee’ means there is no risk to your beneficiaries of having to repay debt if your home loses value.
The Risks
- Some lenders charge a higher rate of interest for this feature.
- If you release more equity from your home at a later date, the amount of inheritance protected will be reduced.
- Any means-tested benefits you might claim could be impacted if you withdraw a large equity payment.
- Compound interest rates increase over time, meaning that the final interest could be large.
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 a protected lifetime mortgage works
Many people worry that an equity release plan means that they cannot leave an inheritance for their loved ones, but this is not the case. Leaving an inheritance is something that can make a huge impact in the lives of your family, and a protected lifetime mortgage option allows you to choose a portion of your homes future value to pass on when your home is sold.
Like all lifetime mortgages, you will be able to unlock tax-free cash from your home and retain full ownership of your property, leaving you free to enjoy financial freedom in your retirement while also looking after your loved ones.
For example, if you had £70,000 available to release, you could choose to take a payment of £40,000. This is 57% of the total money currently available. You therefore protect 43% of the final value of your home for your family.
Like all lifetime mortgages, to be eligible the youngest applicant must be over 55 and the property must be valued at more than £70,000. You can find out more about the eligibility criteria on our website.
How we help
It is a regulatory requirement that you take advice from a qualified equity release advisor for a lifetime mortgage. Our advice is always impartial.
To help you decide if a protected lifetime mortgage is right for your personal circumstances, you will be assigned a personal advisor to take you through your options. If you decide to go ahead, this person will stay with you throughout the entire process, offering friendly and expert advice at every stage.
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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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