Interest Only Mortgages
An equity release interest only mortgage allows homeowners over the age of 55 to borrow a cash lump sum via a mortgage secured on your property.
As long as interest payments are made on a monthly basis the amount you borrow never increases. The original loan is only repaid when your house is sold. This could be when you die, enter into long-term care or move property.
Unlike conventional mortgages the interest rate is fixed for life. This gives you the peace of mind and certainty that your monthly repayments will never increase.
If your circumstances change in the future, you have the option to switch to a “lifetime mortgage” where no monthly repayments are required. This change may result in a higher interest rate being applied to the borrowing but ensures you can remain in your home even if the repayments become unaffordable.
Important factors to consider:
- Releasing equity from your home will reduce the value of your estate, affecting the amount of inheritance you will be able to leave
- Releasing equity may affect your tax position and entitlement to any means tested state benefits
- Assess the alternatives to releasing equity from your property - e.g. downsizing
- Future property prices may be higher or lower than they are today
- Obtain a second opinion, discuss your plans with family or a trusted friend
This is an equity release plan. To understand the features and risks, ask for a personalised illustration.