Protected Lifetime Mortgage
Should you be concerned and possibly put off releasing equity because you feel house prices will not increase much even in the future and fear the debt under a roll up lifetime mortgage could therefore leave you with too little money to leave to family, a protected lifetime mortgage could be the answer, especially if you do not need to raise the very maximum amount possible for your age.
What is a Protected Lifetime Mortgage?
A protected lifetime mortgage is still a form of roll up lifetime mortgage, but instead of only guaranteeing that no negative equity will ever be created, a protected plan goes one step further and guarantees that in addition there will be always be an agreed percentage of your homes current value to be left to beneficiaries, regardless of what happens to house prices.
This guarantee, which is only available on lump sum versions of lifetime mortgages (not drawdown), can be provided because under such schemes you agree at outset for the provider to reduce the current value of your home by the same percentage as you want to guarantee for the future or only take a percentage of what you are entitled to take which in turns protect the same remaining share of your homes property will remain protected at least until further drawdowns are taken.
This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration.
Protected Equity Release – How it works?
To further explain this, lets look at the following example:-
Example: If you would like to guarantee 25% inheritance and the current value of your property is £200,000, instead of the provider allowing you to release their publish percentage (based on your age) based on £200,000, they will reduce the current market value of your home by 25% i.e £200,000 x 75% = £150,000 and then apply their published percentage for your age on this reduced valuation. This would then give you the reassurance that no matter what happens to house prices in the future, providing you do not want to take more in the future, it will mean you can be assured that there will always be £50,000 (in this example) to leave to beneficiares.
Protected Lifetime Mortgage - Advantages
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Gives you the ability to safeguard an agreed inheritance.
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Such guarantees are normally offered without any corresponding increased interest rate.
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Doesn't cost any more to set up.
Protected Lifetime Mortgage - Disadvantages
- It limits the amount you can borrow at outset.
Find Out More About Protected Equity Release Schemes?
Should you want to find out more about how much you could release under such a scheme, please call us now on FREEPHONE 0800 970 4883 or complete our online enquiry form
as our equity release calculator does not allow for this guarantee.
Further information about equity release
Clicking on any of the following links will allow you to find out more about key information on releasing equity from your home.
What types of schemes are there | Why use us | How to request a brochure | How to book an appointment