With a Lifetime Mortgage, a loan is taken out on the property to provide a lump sum, an income or a combination of the two. No capital is payable until the home is sold, which could be when you and your partner have both gone into long-term care or died. Interest on the capital borrowed is charged and typically added to the mortgage monthly.
A Lifetime Mortgage with a drawdown facility allows you to take the cash in stages, as and when suits you. This gives flexibility and the reassurance that you can access further funds at some point in the future, should you need them. It is more cost-effective, as interest is only charged on funds when they are drawn down.
Professional advice is essential and equity release isn’t the right solution for everyone. Releasing cash from your home reduces the value of your estate and the amount of inheritance you leave, so you should involve your children and dependants from the outsetThink carefully before securing other debts against your home. Equity released from your home will be secured against it.