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  • Drawdown Lifetime Mortgage

Drawdown Lifetime Mortgage

How does it work?

Similar advantages and disadvantages as a regular lifetime mortgage, with additional issues that are unique to this kind of equity release scheme. The main difference is that you don't request the full sum of money available to you immediately. Instead, you decide on a maximum amount of equity you want to release, and 'drawdown' the cash in stages as and when required.

ADVANTAGES

  1. You are in control of your money as you can release cash when it suits you , or you may be able to request a monthly income with no monthly payments to make
  2. You retain full ownership of your home
  3. You only pay interest on the amount of equity released from your home, so interest could accumulate more slowly than with a regular lifetime mortgage
  4. Drawdown Lifetime Mortgage plans may be available to younger people (aged 55+)
  5. Some Drawdown Lifetime Mortgage plans let you guarantee an inheritance for your family

DISADVANTAGES

  1. Interest rates are usually higher than on a standard lifetime mortgage
  2. Reduced amount available to leave as an inheritance
  3. Interest grows quickly as it is compounded
  4. If you want to increase the amount of equity released beyond the original amount agreed, you would normally have to apply for a further advance, which is not guaranteed
  5. If you repay the lifetime mortgage loan early, you may have to pay an early repayment charge
  6. Your tax position and certain state benefits may be affected

Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.
Equity Release, Lifetime Mortgages & Home reversion Plans will reduce the value of your estate and can affect your eligibility for means tested benefits.

Drawdown Lifetime Mortgage

How does it work?

Similar advantages and disadvantages as a regular lifetime mortgage, with additional issues that are unique to this kind of equity release scheme. The main difference is that you don't request the full sum of money available to you immediately. Instead, you decide on a maximum amount of equity you want to release, and 'drawdown' the cash in stages as and when required.

ADVANTAGES

  1. You are in control of your money as you can release cash when it suits you , or you may be able to request a monthly income with no monthly payments to make
  2. You retain full ownership of your home
  3. You only pay interest on the amount of equity released from your home, so interest could accumulate more slowly than with a regular lifetime mortgage
  4. Drawdown Lifetime Mortgage plans may be available to younger people (aged 55+)
  5. Some Drawdown Lifetime Mortgage plans let you guarantee an inheritance for your family

DISADVANTAGES

  1. Interest rates are usually higher than on a standard lifetime mortgage
  2. Reduced amount available to leave as an inheritance
  3. Interest grows quickly as it is compounded
  4. If you want to increase the amount of equity released beyond the original amount agreed, you would normally have to apply for a further advance, which is not guaranteed
  5. If you repay the lifetime mortgage loan early, you may have to pay an early repayment charge
  6. Your tax position and certain state benefits may be affected

Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.
Equity Release, Lifetime Mortgages & Home reversion Plans will reduce the value of your estate and can affect your eligibility for means tested benefits.

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Company address: Family First Financial Ltd, 7 Bell Yard, London, WC2A 2JR T: 07951793579 E: mariankaikai@familyfirstfinancial.co.uk

Family First Financial Ltd is an appointed representative of Quilter Mortgage Planning Limited & Quilter Financial Services Ltd., which are authorised and regulated by the Financial Conduct Authority. Quilter Mortgage Planning Limited and Quilter Financial Services Limited are entered on the FCA register (https://register.fca.org.uk/s/) under reference 440718 & 440703.

Family First Mortgages Ltd is registered as a company in England & Wales No: 11432105. Registered Address: 7 Bell Yard, London, United Kingdom, WC2A  2JR.

The guidance and/or information contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Approver Quilter Mortgage Planning Limited & Quilter Financial Services Limited. 10/08/2022

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