Which is the Best Interest Only Lifetime Mortgage Scheme?September 25th, 2013
Firstly, we need to determine what aspect of an interest only lifetime mortgage is the most important to consider it as the best. Before we do that, let’s summarise.
We are assuming that our interest only lifetime mortgage requires monthly payments of interest, and the balance on the mortgage remains the same until the mortgage is over. This is usually when the property is eventually sold. The Stonehaven Interest Select plans, the more2life interest choice & we could also now include the Hodge Flexible Lifetime Mortgage plan all as examples of the best interest only lifetime mortgage scheme. There are many factors to be considered while choosing an interest only lifetime mortgage and finding the best mortgage in this area depends entirely upon your individual circumstances and needs.
An interest only lifetime mortgage can assist people over the age of 55 in freeing up the equity tied up into the house either in the form of a lump sum or future drawdown instalments. If you need a lump sum for a one off expense such as a holiday, new car, extension at home, or to help family or children, a lifetime mortgage that provides a tax free lump sum could be best suited to you.
Lowest interest rates are another common criteria that people have while searching for the best interest only lifetime mortgage. With interest only mortgages, the lowest interest rate means the lowest monthly payments. If this is your objective, a qualified equity release adviser can help you compare different lifetime mortgages based on their interest rate, while also comparing other terms and factors, helping in choosing the right equity release scheme.
The Halifax Retirement Home Plan was very successful and one of the reasons Halifax had to withdraw it was that they were unable to cope with the huge demand! This shows the potential draw of such a retirement mortgage. There are other products in the market similar to the Halifax equity release mortgage – namely the Stonehaven Interest Select and the more2life interest choice plan which is are both interest only lifetime mortgages with monthly repayments. They are protected by the FSA and also a member of the Equity Release Council (formerly SHIP) consortium.
Other important factor to consider while choosing an interest only lifetime mortgage is how much your income is during retirement? Expenses must also be considered as well as all sources of pension income. This will determine how much you can afford to pay monthly on the mortgage. If you are planning to move house in the future, it is important to choose a mortgage that can be carried over to the new property and is therefore portable. You need to not only plan for today, but also keep one eye open for the future as health can also play an important role in governing where your future lies.
Some lifetime mortgages have early repayment penalties applicable when early repayment of the balance is made. If reducing the balance or paying it off early is your goal then it is important to consider this while shopping around for the best interest only lifetime mortgage. More companies are set to enter the interest only lifetime mortgage market with product development underway at various equity release providers. It is therefore likely that many more options will become available very soon so watch this space!
Call 0800 678 5159 today to find out whether you could qualify for an interest only lifetime mortgage.