How a payment-term lifetime mortgage could work for you
CASE STUDY EXAMPLE Release more tax-free cash from your home Stephanie Higgins, aged 55, is a divorced nurse from Shropshire. She has an outstanding mortgage of £78,000 she wishes to repay. Stephanie tried to release equity previously but found she wasn't able to unlock enough money from her home to meet her needs. However, thanks to Key’s payment-term lifetime mortgage, that’s about to change.
Illustrative example
Lifetime mortgage 2
Payment-term lifetime mortgage 3
£286,000 £60,060
£286,000 £78,650
House value
Maximum release 1
6.83% MER
6.83% MER
Interest rate
£200 (Until Stephanie's 66th birthday, then £0 after)
Mandatory monthly payment
£0
Payment-term lifetime mortgage arrangement fee of £999 not included in calculation. With a lifetime mortgage, Stephanie is only able to release just over £60,000 from her £286,000 home. This leaves Ms Higgins a little under £18,000 short of the money she needs to clear her existing mortgage. However, with a payment-term lifetime mortgage, by committing to making mandatory payments of £200 until Stephanie's 66th birthday, she can release a further £18,590 – which gives Ms Higgins the money she needs to clear her existing mortgage. Throughout her payment-term lifetime mortgage, Stephanie can make voluntary ad-hoc or regular overpayments of up to 10% of the initial loan amount each year without incurring an early repayment charge to help manage her total cost of borrowing, but there are no mandatory payments after she turns 66. Case study example. (1) The amount of tax-free cash this customer can release from their home through a comparable lifetime mortgage. We always recommend only releasing what you need. (2) Flexi Choice. (3) Flexi Choice payment-term lifetime mortgage. Interest rates are for illustrative purposes only. Speak to a Key adviser for a personalised illustration. You may be able to release a higher amount with an alternative lifetime mortgage; however, the total cost of borrowing may be significantly more.
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