A lump sum lifetime mortgage is a straightforward, simple lifetime mortgage. It offers a one-time lump sum payment of equity with no additional features available.

As the homeowner, you would determine how much equity you need to release from your property. When determining how much you need from your lump sum mortgage, you should keep in mind that this particular product does not always allow for an additional cash release in the future so you want to be careful when predicting how much money you’ll need.

You then very simply take out a loan secured against your property in exchange for the lump sum payment. You should expect a fixed interest rate to be applied to your loan amount. You typically will not need to make any repayments against the loan balance, though some products may offer the option to make repayments. The full loan balance will need to be repaid in full when the home is eventually sold, which typically takes place when the last remaining homeowner either passes away or moves into permanent long-term care.

A lump sum lifetime mortgage is particularly suitable for the homeowner who does not need any special features. Because so few features are offered with this particular product, you should expect to benefit from a very competitive interest rate which can help control the full loan balance when it is due in full. This product also works for the homeowner who needs to exercise control over a budget.

The full amount of equity release available will depend on your individual circumstances, most specifically your age or the age of the youngest homeowner, and the property value. Generally speaking, you are eligible for more equity release the older you are in age. This is simply because your life expectancy continues to decline as you get older. Determining how much you need to borrow is a key part of determining how a lump sum lifetime mortgage will work for you.

If you do select a lump sum lifetime mortgage product, you may be eligible for additional borrowing in the future if you need additional cash. The availability of this cash will utilize an equity release calculator to determine if you are eligible for extra funds. This calculation will include the age of the youngest homeowner and the revaluation of the property and will also deduct the existing mortgage balance. If there is a surplus remaining, additional borrowing may be available.

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