Page 6 - ShortShort guide 2020
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Drawdown Lifetime Mortgage
Drawdown plans work in a similar way to standard lifetime mortgages but with the flexibility to ‘drawdown’ cash as and when you need it. You can take a smaller initial amount and then release cash over time. This can be more cost-effective as interest is only added to the money released so you could pay less interest over the course of the loan.
Income Lifetime Mortgage
With an income Lifetime Mortgage you can effectively ‘top up’ your pension with regular cash supplements from the Equity in your home. You can release the cash for a fixed term rate for anywhere between 10 - 25 years. The minimum amount of monthly payment you can receive from your policy is £200. Interest is only applied on the money you have withdrawn, not the full lump sum. Which helps to keep the interest amount low.
