In our current economic climate, many pensioners are in need of more than one source of income. Their pension plan or retirement funds are no longer sufficient to meet their daily needs. An interest only lifetime mortgage plan is a simple way for pensioners to obtain additional capital which can maybe also used to provide income if required. An interest only mortgage plan is available to people who are above age fifty-five.
The advantage of an interest only lifetime mortgage is that it helps to protect your inheritance. If you want to pass on your property to your children or grandchildren, but at the same time you want to release equity from your property while you are still alive, an interest only lifetime mortgage is the best option for you.
So how exactly does an interest only lifetime mortgage help you to protect your inheritance?
Other equity release schemes allow you to borrow without having to make any monthly repayments. Eventually, you will have a large amount that you will need to repay because you will have to repay your initial loan amount and the compounded interest amount. In many cases, if you have longevity, the amount that you will have to repay could be as large as the value of the property. Once you sell the property and deduct the amount that needs to be repaid, you will not have much to pass on to your children or grandchildren.
However, if you opt for an interest only lifetime mortgage, you will have to pay the interest amount during the duration of the mortgage. The initial loan amount does not decrease nor increase. It stays the same. Eventually, you will only need to repay the initial loan amount. If it is necessary for the property to be sold to repay the initial loan amount, depending upon how much you originally borrowed will determine how much of your property value will pass on to your children and grandchildren. Most lenders do not allow you to borrow more than fifty percent of your property’s value.
The Stonehaven Interest Select plan is a prime example of the interest only equity release scheme that allows you to protect your inheritance. With their inheritance protection features & fixed interest rate for life, Stonehaven are leading the way in the interest only lifetime mortgage market.