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Releasing a cash lump sum enables you to improve your lifestyle, as you are free to use the money for any purpose you wish. You may choose to improve your home, make essential repairs, install facilities, which enhance your standard of living or take a holiday. The choice is yours.
With this plan a legal charge is secured on your home and a cash sum is provided, which you may spend as you wish (subject to repayment of any existing mortgage). For as long as you live and so long as you continue to occupy your home, you need not make any repayments on the lifetime mortgage loan. Loan interest is charged at a fixed rate, calculated daily and added to the lifetime mortgage loan each month. You continue to own your home.
This lifetime mortgage is secured on your home and is repayable from the proceeds of the sale of your home. As well as an initial lump sum, it provides a pre-approved Cash Reserve facility, from which you may make further withdrawals at any time subject usually to a minimum of £2,000. You continue to own your home. With both Lifetime Mortgage options it is possible to pay the interest each month. The amount you originally borrowed is then repaid when the arrangement ends.
 If you move into certain types of sheltered accommodation you may be able to transfer your arrangement to the new property. It is also acceptable for the mortgage to be repaid from alternative sources should your family wish to keep the family home.
You sell your home, or a proportion of it, to a reversion company and you (and your partner if applicable) continue to live in it until the arrangement ends. You will normally get less than the full market value of your property. Usually you do not pay any rent, or if you do it is a token amount. After the arrangement ends, the reversion company receives the full value of the proportion of the property you have sold, and if applicable your estate receives the full market value of the proportion of the property you have retained ownership of.
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