Lump Sum Mortgage Scheme

Retirement Advantage Lump Sum Schemes

The Retirement Advantage Lump Sum mortgages, or Lifestyle Options products, offer a tax-free one-time payment to homeowners with no obligation to repay the loan, or make regular payments. That single tax-free lump sum payment can be used at the homeowner’s discretion, for whatever they want.

These Lump Sum Lifestyle mortgages offered by Retirement Advantage are most suitable for those homeowners who want to receive a one-time lump sum upfront. These mortgages usually work best for those homeowners who want a higher loan-to-value, with a lower interest rate. Additionally, these lump sum mortgages work well for those homeowners who cannot prove affordability, or cannot afford to make payments on their loan. e.g. self-employed. Those who are likely to be unable to prove affordability, are those who do not have a steady stream of income and therefore cannot prove that they are able to afford regular payments.

The Lifestyle Lump Sum Option products use a traditional interest roll-up scheme, so the interest is rolled-up and added to the mortgage each month. No payments are due by the homeowner and the interest rate is fixed at the outset of the loan so it will never change. Customers can borrow anywhere from £10,000 to £1 million. There is no cashback option offered with this line of products.

Lifestyle Lump Sum Lifetime Mortgage Range

There is a total of four separate Lump Sum Lifestyle mortgage products offered by Retirement Advantage. The Lifestyle Lite starts the product range with the lowest loan-to-values (LTV), starting at 16% at age 60. Next comes the Lifestyle Gold which has a higher LTVs, then the Gold Plus and finally the Lifestyle Platinum with the highest of the LTV’s, starting at 32% of the property value at age 60.
If the homeowner takes advantage of the cash reserve facility feature, their monthly interest rate will increase by 0.20%.

Some of the features of all four of the Lifestyle Options products are below:

Fixed Early Repayment Charges: The early repayment charge for products offered by Retirement Advantage never surpasses 5%. For the first five years of the loan, the early repayment charge is 5%. For years 5-8, the charge is 3% and for years 9 and above, there is no early repayment charge.

Cash Reserve Facility: The cash reserve facility allows homeowners to take advantage of additional borrowing in the future if they need or want to do so. This feature can be added right at the outset of the loan or they can choose to apply for additional borrowing in the future. If the cash reserve facility option is taken, the monthly interest rate on the loan will increase by 0.20%.

Inheritance Guarantee: The Inheritance Guarantee is offered free of charge to consumers and gives homeowners the ability to take advantage of an equity release product while also safeguarding an inheritance for their loved ones.

Additional borrowing: Dependent upon lending criteria at the time, existing plan holders can apply for a further advance of equity. The minimum amount allowed for additional borrowing is £4,000 and lending will based upon criteria of the existing product LTV range.

To Whom Will Lifestyle Lump Sum Plans Appeal to?

Homeowners wanting the interest to roll-up for the rest of their lives

For those happy to have the lump sum plus no repayments and ok with the compounding effect, even though this will erode equity in the property. These homeowners won’t be concerned with the future balance of their equity release plan

Those maybe with no children, or feel they do not wish to leave their children any, or limited inheritance

Homeowners who do not wish to have the commitment of monthly, or voluntary repayments and the worry this may bring for those with limited budgets

Further Information

To find out more about the current interest rates and best Retirement Advantage equity release deals on this range of Lump Sum Lifestyle plans, please visit our Lump Sum Compare Deals Table.

These are lifetime mortgage plans. To understand the features and risk, ask your independent equity release adviser for a personalised Key Facts Illustration

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