What Should I Consider When Releasing Equity?

A Lifetime Mortgage from Responsible Lending has features designed to protect you, your property and your loved ones. We have also built safeguards designed to make sure that you can only have one if it’s suitable for your needs.

To protect you and your loved ones, all plans come with a ‘no-negative equity guarantee’. In plain English that means no matter what you take out of your property with a Lifetime Mortgage, you will never owe more than the value of your home. This means you will never leave any debt to your loved ones as a result of taking out a Lifetime Mortgage.

Your adviser will show you a personalised illustration before you proceed, which shows you exactly how much will be owed over each year you have the mortgage. Because our rates are fixed for life, this will be exact rather than an estimate.

Although there are protections, there are some points you should consider.

Interest builds up only on amounts that you borrow and not on any unused cash facility on your initial advance.

The interest rate you pay on your initial advance will be fixed at the time you take out your mortgage and is guaranteed not to change. If you have a cash facility and take an additional advance, the interest rate for that will be set at that time and may be higher or lower than the rate you are paying on your initial advance.

Interest builds up on a compound basis, which means interest will be charged on the amount of your mortgage as well as the interest that has built up in previous years.

Access to additional borrowing, including the cash facility, is subject to terms and conditions.

The total amount you owe, including any interest, will usually be repaid from the eventual sale of the property when you die or move into permanent long-term care.

As with any mortgage arrangement, it’s a decision which you will need to consider carefully.

Your Lifetime Mortgage is a lifelong commitment and is designed to be repaid when you (or both of you if you are borrowing jointly) have died or moved into permanent long-term care. If you repay your Lifetime Mortgage early, you may have to pay a substantial early repayment charge.

Lifetime Mortgages aren’t right for everyone and may affect your entitlement to state benefits.

Lifetime Mortgages will reduce the value of your estate.

We do not consider that Lifetime Mortgages are a suitable product for customers looking to raise capital to invest and will not lend to you if you put this as the stated mortgage purpose.

A Lifetime Mortgage is secured against your home.