Lifetime Mortgage Or Home Reversion?

What are the products?
There are two main products – Lifetime Mortgage or Home Reversion Plan.

What is a lifetime mortgage?

A lifetime mortgage is where you retain ownership of the property. The loan is repaid at the end of the term, together with any interest that has rolled up if you decide not to service the interest payments.

This is very similar to a typical mortgage, although a lifetime mortgage has no fixed term. It is repaid in full to the lender, together with any rolled up interest, on permanent vacation of your home.

What is a home reversion plan?

A home reversion plan is where the lender buys up to 100% of your home and rents it back to you for a nominal fee e.g. £1 per month. However, you lose ownership of up to 100% the property and may have zero equity left.

Are the products different?

As more lenders are coming into the Equity Release market, there is a wide variety of features which providers now offer with their products, such as cashback on completion, or a free valuation of your property.

Some lenders allow overpayments on a lifetime mortgage, which effectively turns it into a standard repayment mortgage. Typically you can overpay up to 10% of the outstanding plan every 12 months.

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What interest options are there?
There are two types of interest options – rolled up or interest only.

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What is interest only?

This is basically an interest-only mortgage with no end date that allows the customer to pay just the interest on the loan each month.

The loan will be paid back on permanent vacation of your home, such as the sale, moving into long-term care, or passing away. If your children or family want to keep the house, they can choose to repay the loan and maintain ownership.

What is rolled-up interest?

Interest is rolled up and added to the loan and is only repaid on permanent vacation of the property. This is usually due to death or moving into long-term care.

The Giraffe guarantee: If equity release is not right for you and your family, we’ll tell you.

How can I take the money?
There are two main ways to take your money – either as a lump sum or as a drawdown.

A lump-sum product means you take all of the cash you release from your home in one go. A drawdown allows you to take up to a set amount as and when you need it the most or regularly.

How am I protected?

The equity release market is regulated by the Financial Conduct Authority (FCA). We only advise on products where the provider is part of the Equity Release Council, where certain conditions have to be met.

Any lender who is part of the Equity Release Council has to provide a ‘no negative equity guarantee’ with their products. This means that the amount you owe the lender will never be worth more than the value of your home.

You can also choose to protect a certain percentage of the value of your home, of which the lender cannot claim at the end of the term. For example, you can choose to safeguard 10% of your estate, which means that at end of the mortgage, you, or your beneficiaries will receive at least this percentage of your home’s value at that time.

All of our advisers hold the relevant qualification in Equity Release and the firm is regulated by the Financial Conduct Authority (FCA).

Before you begin this process we recommend that you speak to your family.

If equity release is not right for you and your family, we’ll tell you.

Which providers do you use?

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The main providers in the market are: Hodge Lifetime, Canada Life, Retirement Bridge Group, Aviva, Legal and General, Just Retirement, Liverpool Victoria, onefamily, Retirement Plus, more2life and Pure Retirement.

More providers are joining the market due to customer demand and our equity release specialists have access to the whole market.

I decided to use a lifetime mortgage in order to purchase a more suitable home for myself in retirement. I wanted to buy a brand new flat, but it was more expensive than my current property, so was advised that equity release could be used to help. I took a lifetime mortgage on the new flat and this covered the balance I needed to buy it after selling my old home. I am absolutely over the moon in my new flat and cannot thank the advisers at Giraffe enough. I will be recommending them to all of my friends!

Daniel, Devon

We used equity release to pay off our current interest only mortgage which was due to expire and therefore be repaid to the lender. We had no means to repay this until we were advised that a lifetime mortgage could be used to clear the balance and let us remain in our family home as we did not want to downsize. We now service the interest on a lifetime mortgage, which is great as we know exactly how much debt will remain. We both could not fault the service we received from our Giraffe adviser who took their time explaining the ins and outs of the products, and answered all of our questions efficiently.

Mick & Elaine, Cornwall

I unfortunately lost my husband unexpectedly, and as his pensions ceased on his death, I did not have sufficient income to maintain my standard of living. I therefore used a lifetime mortgage to release funds from my house, which now provide an income for me in my retirement. The service I received from my allocated adviser was second to none and they understood my situation, taking time to explain all of my options. I can now continue to live in my house and pay my bills, as well as continue my membership at my local golf club!

Susan, Wiltshire

I decided to release some of the equity in my home because I wanted to help my daughter get on the property ladder by giving her the cash for a deposit. I also chose to use some of the funds released to have a new kitchen and bathroom fitted, which I’m now delighted with. The whole process was made effortless as I was able to speak to the same adviser throughout, who explained everything to me in detail.

Jackie, Surrey

What happens next?

Use our calculator to see how much you could potentially release from your home.
Call Giraffe Equity Release on 0800 622 6414.
Visit one of our offices or we can come to you for a FREE initial consultation.
Have an interview (face-to-face or on the phone) with one of our qualified advisors.
We will source the right product for you from across the whole market.
We start the application process and a valuation of your property is instructed by the chosen provider.
Application is approved by the provider and your solicitor.
The funds are released for you to use.

What are the products? There are two main products – Lifetime Mortgage or Home Reversion Plan.