A Home Income Plan is a form of Lifetime Mortgage

Under a Home Income Plan version of equity release, you mortgage a percentage of your property to a provider who in return gives you a lump sum which automatically buys you an annuity (a regular income for the rest of your life based on your age and sex). Unlike a roll up type of Lifetime Mortgage you automatically have the interest on the loan deducted from the annuity payments each month. This way although you do not benefit from the total annuity income, at least the debt doesn't build up.

Whilst this means that only the capital is repaid on sale of your house on death or long term care it means that the net income received from the annuity is reduced. Due to tax relief on mortgage payments no longer being available and the low rates offered on annuities Home Income Plans currently need to be approximately 80-85 at the outset for them to prove attractive.

Home Income Plans - Advantages

• Forced to buy an annuity, which is a safe way of providing an income.
• You may be able to take some lump sum in addition to the annuity.
• The older you are the higher the income.
• As interest is repaid automatically the reduction in the homes value is minimised.

Home Income Plans - Disadvantages

• You are committed to an annuity as a means of extra income, leaving you no choice of alternatives.
• You do not have the option of allowing the interest to build up, so the reduced annuity may not improve your financial circumstances greatly.
• Home Income Plans involve borrowing against your home and may work out more expensive in the long term than downsizing to a smaller property, and may affect your entitlement to State benefits and grants.

For a comparison of Home Income Plans and other equity release schemes click here.

If you would like some further information on Home Income Plans and other equity release schemes, please complete our equity release enquiry form and we will  call you back shortly. Alternatively please feel free to phone us on 0118 958 8810.

You will always receive courteous service in the strictest confidence from highly trained staff who all value your custom. Your business will be dealt with in a friendly, efficient and personal manner at all times.

This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration.