Benefits and drawbacks of lifetime mortgages Like any financial product, equity release has benefits that are designed to help you, but also has drawbacks which are important to consider.
*Remember a mortgage is a loan secured against your home. Your home may be repossessed if you don't keep up repayments. Credit and affordability tests apply. If another product is more suitable, we'll refer you to a different adviser within Key Group who can help. If you go ahead, you'll only be charged the same £599 advice fee you’d pay with us, even if their fee is usually higher. What other options are there? If an alternative later life mortgage is right for you, we’ll pass you over to another specialist adviser within Key Group who’ll search the whole market to find the right product for your circumstances. Here are some examples of different products and solutions that may be right for you: Later life residential mortgage If you think you’re too old for a standard mortgage or can’t find a conventional one to meet your needs, we can refer you to our expert mortgage advisers to help. Mortgages can be used to buy a new property, remortgage an existing one, or release additional funds. It can be on a capital repayment or interest-only basis.* Available through Key Group Retirement interest-only mortgages A retirement interest-only mortgage (RIO) is a mortgage where you pay the interest every month until the plan ends. The original loan amount is repaid when the plan comes to an end, which is usually when you (or the last remaining applicant) either pass away or move into long-term care. A RIO is typically available to people aged 55 or over.* Available through Key Group
The interest can build up quickly Lifetime mortgages are loans secured against your home and are subject to compound interest, meaning the amount you owe can grow quickly (see page 14 for an explanation of compound interest) Reduced or no property equity Equity release may leave you with limited or no property equity remaining and will reduce your financial options in the future Effect on estate & means-tested benefits Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits Long-term financial product These are long-term financial products and are not designed to be repaid early. If you do, early repayment charges may apply
Tax-free cash You can unlock cash from your home, tax-free, to help meet your needs in later life Stay in your home With a lifetime mortgage you'll always own your own home and have the right to stay in your property for as long as you wish Reduced or no monthly repayments You can make reduced or no monthly repayments with a lifetime mortgage. However, overpayments can be made at any time, subject to criteria No negative equity guarantee You’ll never owe more than your home's worth or pass on any equity release debt to your family, providing you keep to the terms of your plan You can still move house You have the right to move home in the future, subject to criteria
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