Our Lump Sum Lite Lifetime Mortgage
Our Lump Sum Lite Lifetime Mortgage is designed for those who want to release a one-off lump sum without the option to access a pre agreed cash facility in the future. It usually allows your clients to borrow a higher amount than the Drawdown Lifetime Mortgage, but normally at a higher interest rate.
Your client won't need to make any regular repayments on the money borrowed, and will continue to own their home, benefiting from any increase in its value.
How does it work?
The interest payable on our Lump Sum Lite Lifetime Mortgage is fixed at the time the mortgage is taken out, and is guaranteed not to change regardless of what happens to interest rates in the future.
Interest is charged on the lump sum advance, and will accumulate on a compound basis. The mortgage, plus interest is only repaid once your client dies or moves permanently into long term care.
The interest rate on our Lump Sum Lite Lifetime Mortgage is usually higher than the rate charged under our Drawdown product. Clients can borrow a higher amount with the Lump Sum Lite Lifetime Mortgage, which could be invaluable if they need access to the money. But the value of their mortgage will be higher than an equivalent Drawdown Lifetime Mortgage product at the time it is repaid.
Key features are summarised below
|Feature||Lump Sum Lite Lifetime Mortgage|
|Minimum property valuation||£70,000|
|Maximum LTV||Between 27.4% and 50.5%, dependent on client's age, property value, health and lifestyle conditions|
|Maximum cash advance||The lower of £600,000 (England only. £250,000 in Scotland and Wales) or the maximum LTV. A lump sum cash advance is provided at the outset, and there will be no guaranteed unused cash facility to draw down additional cash advances. Further cash advances may be requested after six months from the policy start date, however these further cash advances are not guaranteed.|
|Minimum cash advance||£10,000. Please note that the Drawdown Lifetime Mortgage may be more suitable for lower loan amounts, as the interest rate charged on the Lump Sum Lite Lifetime Mortgage will usually be higher.|
|No negative equity guarantee||Applies on death or sale of property at any time, and includes reasonable costs of sale.|
|Interest rate||Fixed interest rate set at the time of the lump sum cash advance. Interest is compounded annually.|
|Death or moving into permanent long-term care||Repayment of mortgage (with no early repayment adjustment).|
|Early Repayment Charge (ERC)||No ERCs for joint borrowers, if repaid within three years of the death, or entry into permanent long term care of one borrower.|
|ERC free partial repayments||Can make partial repayments without incurring ERCs. Able to pay back up to 10% of each advance in each 12 month period following completion. Subject to no more than a total of six payments in the relevant 12 month period for each advance. The minimum amount customers pay in each instalment is £500, and the overall amount owed must not fall below £10,000.
If there is more than one advance, the amount of any partial repayment will be allocated between the advances in proportion to the amount owed on each advance.
For existing customers, different terms and conditions may apply depending on when your client took out their lifetime mortgage.
Please refer to the lifetime mortgage documentation they were given at the time of completion, or contact us >
Latest Lump Sum Lite Lifetime Mortgage rates
Our current interest rates range from 4.70% AER to 4.90% AER, dependent on the customer's age (the minimum for our Lump Sum Lite Lifetime Mortgage is 60). These rates are valid as of October 2018.
The interest rate that will apply to the further advance requested will be determined by the customer’s new total accumulated loan balance and the relevant loan to value scale. We have three LTV scales – Drawdown, Lump Sum Lite and Lump Sum Plus.
Lump Sum Lite LTV rates
Our age-related maximum loan-to-value factors are valid as of August 2018.
|Client age||Single Lump Sum Lite||Joint Lump Sum Lite|