Our Drawdown Lifetime Mortgage
Our Drawdown Lifetime Mortgage gives your clients a flexible cash facility against which they can draw down cash advances at any time.
How does it work?
We will calculate a maximum loan amount based on your client's age and property value. From this amount we will advance them an initial sum. After this, money can be drawn down on a regular or an adhoc basis, subject to the arranged cash facility at the outset.
The interest payable on our Drawdown Lifetime Mortgage is fixed at the time of arranging the mortgage, and is guaranteed not to change regardless of what happens to interest rates in the future. Each initial advance has a separate interest rate calculated at the time it is requested. That interest rate is fixed for the lifetime of the loan, but can be different to the initial advance (and other drawdown sums).
Interest is charged on the initial cash advance and any subsequent advances, and will accumulate on a compound basis. The mortgage plus interest is only repaid once your client dies or moves permanently into care.
Our latest loan to value (LTV) rates can be found below.
Your client will continue to own their home and will also benefit from any increase in its value, while our no negative equity guarantee means that they will never owe more than their house is worth.
Key features are summarised below.
|Feature||Drawdown Lifetime Mortgage|
|Minimum property valuation||£70,000|
|Maximum LTV||21% to 47% depending on client's age|
|Maximum cash facility||The lower of £600,000 for properties in England (£250,000 in Scotland, Wales and Northern Ireland), the maximum LTV or three times the initial cash advance, subject to an unused facility no greater than £200,000|
|Maximum initial advance||£600,000 in England, £250,000 in Wales, Scotland and Northern Ireland|
|No negative equity guarantee||Applies on death or sale of property at any time, and includes reasonable costs of sale|
|Interest rate or charge||Fixed interest rate set at the time of each cash advance.
Interest is compounded annually
|Death or moving into permanent long term care||Repayment of mortgage (with no early repayment charge)|
Latest Drawdown Lifetime Mortgage rate
Our current interest rate of 5.29% AER applies across all our age bands (the minimum age for our Drawdown Lifetime Mortgage is 60). The overall cost for comparison is 5.5% APR. This rate is valid as of December 2016.
Loan to value
Our age-related maximum loan-to-value factors are valid as of December 2016:
|Age||Maximum LTV %||Age||Maximum LTV %|