Manage borrowing effectively

One of the reasons clients choose a lifetime mortgage is needing funds to clear outstanding debts, including mortgages, credit cards or bank loans. Although using a lifetime mortgage to repay existing debts may cost more in the long-term, it could give clients peace of mind knowing that these debts have been repaid, and allow them to enjoy their later life with less financial stress.

The Just For You Lifetime Mortgage offers all these options below, so it’s easier for clients to manage their debt.

Only taking money (and start paying interest) as and when needed

Available across the lifetime mortgage product range, the drawdown facility enables clients to take an initial lump sum and draw down more, pre-agreed sums later when needed. This means interest only starts accruing as funds are released.

Paying up to 10% advance each year without incurring any Early Repayment Charges (ERC)

If clients don’t choose to service monthly interest, they’re able to pay up to 10% of each advance in each 12-month period without incurring any Early Repayment Charges (ERC).

Using cashback to borrow less

Cashbacks mean clients can borrow less and still get the funds they need. A smaller LTV can result in a lower interest rate. Learn more here.

Servicing interest

Clients choosing to pay 25.01% or more of the monthly interest amount can benefit from a reduction ranging between 0.2% to 1.0% to the roll-up interest rate depending on the Just For You Lifetime Mortgage chosen.

This option also brings other benefits:

• Payment holidays - Clients can take a payment holiday of up to three consecutive months each policy year. Monthly interest not paid during this time will roll up.
   
• Ability to switch to roll-up option later – Clients can switch to a roll-up basis at any time if they decide servicing interest isn’t for them.

To learn more about servicing interest:

• Read Tom and Anna Hill's story to see how they repaid an outstanding interest-only mortgage.
  
  
• Read Christopher Spencer's story to find out how it helps him provide an early gift, whilst protecting some inheritance value.
  
  
• Use our interest serviced calculator to find out how clients could benefit from making monthly payments with a reduction to the roll-up interest rate.
   
• Find out who’s servicing interest and why.
  
  
• Read our House View on the need for interest serviced in the lifetime mortgage market.