With a drawdown lifetime mortgage, like a lump sum lifetime mortgage, there is an overall sum of tax-free cash you could release from your home.
However, with a drawdown lifetime mortgage, from that overall amount, you can take an initial lump sum, and then release smaller amounts when required (subject to minimum amounts).
Drawdown lifetime mortgages offer more freedom than a lump sum plan, allowing you to release money when you need it and adapt to your changing needs in retirement.
A drawdown lifetime mortgage could also save you money over the lifetime of your plan, as interest only accrues on the funds you draw down once they are released so you'll have less of it to pay. If you choose to make a drawdown, the funds will be subject to the prevailing, fixed interest rate at the time which may be higher or lower than your original interest rate
By choosing a drawdown plan, it could be a way to organise your future finances – you could use it to organise your finances to reduce the effect on any means-tested benefits you receive.
Your lender may have the option to withdraw your drawdown facility
There are two forms of lifetime mortgages which let you receive your tax-free funds in two different ways. These are lump sum and drawdown. With our specialist advice, why not let us help you work out the approach that’s most suitable for you and your personal circumstances.
Find out how much tax-free cash you could release from your home with our simple online calculator. Or call on 0800 188 4826 and one of our team will be able to answer any questions you may have.
Your equity release adviser will also outline the following important things to think about:
Before deciding on equity release, our advisers will make sure you're aware of some of your other later life finance options such as retirement interest-only or retirement payment mortgages.
Knowing the costs associated with equity release and how to help manage them is important.
Compound interest explained
How much does equity release cost?
