Lump sum lifetime mortgages

Lump sum lifetime mortgages are a popular type of equity release plan. They are available to homeowners over the age of 55 and allow you to borrow a percentage of the value of your home.

Lump sum lifetime mortgages, as the name suggests, provide your money as a single, one-off amount and so this equity release plan could be ideal is you need to pay for large expenses such as home improvements, repay debts or help children financially.

How much can I borrow with a lump sum lifetime mortgage?

How much money you can borrow with a lump sum lifetime mortgage depends upon three things. They are the age of the youngest homeowner, the value of your property and where you live.

Why not use our quick calculator to get an idea of how much you could borrow with a lump sum lifetime mortgage?

Now that you have an idea of how much you can borrow with this equity release plan, why not compare the latest, lump sum lifetime mortgage deals that are available from all the lenders?

The advantages of lump sum equity release plans

• Allows you to borrow the most you can as a single, one-off amount.
• The money you release is tax-free and yours to spend as you wish.
• Interest rates are competitive and fixed for life.
• You continue to own your home.
• Monthly repayments are optional.
• Available for freehold and leasehold properties.
• Plans are portable. If you want to move in the future, you can take your plan with you.
• Interest accrued and the amount borrowed are repaid when your plan ends. That is when the last homeowner dies or moves into long term care.
• You can make overpayments of up to 10% of the amount borrowed each year (without charge). This could be used to repay the interest accruing on your plan (and reduce the final balance to be repaid.) Why not us our voluntary repayment calculator to find out more?
• Flexible features are available –
  • fixed early repayment charges (where if you don’t want to move home, you can repay your plan penalty-free after 8, 10 or 15 years).
  • downsizing protection (where if you want to move home and repay your plan, you can do after 5 years without charge – subject to meeting the lenders terms and conditions).
  • 3-year early repayment charge exemption. If your partner dies or moves into long-term care, you can sell your home, move and you have 3 years in which to repay your plan, without charge.
• Lump sum lifetime mortgages are offered by well-known brands such as Aviva, LV and Canada Life.

The disadvantages of lump sum equity release plans

• The compound interest that builds up over time and the amount you’ve borrowed are repaid when your plan ends – which is when the last homeowner dies or move into long term care.
• If you choose not to make repayments, a lump sum lifetime mortgage will impact on the inheritance you leave for your loved ones. That’s why it is important to involve your family if you are considering a lump sum equity release plan. We encourage them to join you when you meet with your local adviser, so that they can ask any questions they may have. Why not use our remaining equity calculator to see how equity release could affect the inheritance you leave?
• If you claim any means-tested benefits, you are likely to become ineligible for these as you will probably receive a larger amount of money with a lump sum lifetime mortgage, that will take you over your benefits threshold. If you claim any means-tested benefits, a drawdown lifetime mortgage could be a better option for you.