If you are of retirement age, over 60, and seeking to mortgage your home then there is an important option that you should consider. Instead of a traditional mortgage where you have to pay monthly instalments and interest there is another option. This option is tied to equity release schemes and is called a lifetime mortgage.
It is an interest only mortgage for the over 60s and the way it works is like this. With an equity release scheme you raise funds from your current property either as a monthly payment or as one big lump sum. You and your spouse or partner, retain the right to live there until both of you pass away or move out.
While the lifetime mortgage falls within the equity release scheme it is a variation. It is a particular type of loan for those who are over 60.
It permits the release of funds or equity from the home through a secured loan which is payable upon sale of the property when both partners have passed. You can either let the interest accrue and pay it all upon sale of the home or you can pay the monthly interest and prevent the debt from growing.
With this plan you do not sell ownership of your home, you simply take out an interest only mortgage. This is an easy way to think about it.