Robert and Valerie are a married couple from Durham, they are both 73 and live in a 3 bedroom semi-detached house. The couple have a steady pension income but do not have access to much capital having used a lot of their lifetime savings to support their children with studies, weddings and house purchases.

Robert and Valerie’s purchased their home 15 years ago, they paid £93,500 for the property and it is now value at £200,000. They are very happy in their home and when thinking about their future care needs they are keen to remain in their home with help. To further enable this to happen they would like to make some home improvements, including an additional bedroom and bathroom of ground level in case of future struggles with managing the stairs.

Furthermore Robert and Valerie have enjoyed several cruises during their life and they would like a cruise fund to enable them to plan another cruise whilst they are in good health and physically fit.

Robert and Valerie’s home improvements would cost £15,000 and they would like a £5,000 cruise fund so the total they need to realise these dreams is £20,000. The couple decided that they would release £20,000 via a Lifetime Mortgage, they also chose to not make any monthly payments and are aware that the remaining interest will be added to their mortgage meaning the amount they owe will double every 10 years. This means, that by the time the Robert and Valerie turn 83, the £20,000 they borrowed and the rolled up interest will amount to £40,000 with a 7.5 percent APR.

Even with the £20,000 in equity doubling within 10 years, the amount they borrow will still be less than the property’s overall value, especially when they add the additional bedroom and downstairs bathroom to the property. Robert and Valerie also like that they have the option to “drawdown” further funds up to £40,000 should they need or want to in the future – perhaps another cruise will tempt them!

Another benefit of the drawdown option is that Robert and Valerie will only be charged interest if and when they withdraw funds from their cash reserve facility and that the minimum amount they could withdraw was as low as £2,000, making it easier for them to manage their drawdown lifetime mortgage effectively.With this option and plan in place, Robert and Valerie were able to complete both projects providing them peace of mind for their futures in their home as well as making memories.

Key benefits:

  • Robert and Valerie have accessed a lump sum of money they would not have been able to without selling their home
  • They have been able to remain in the home and make adaptations to enable them to stay there as long as possible even as they grow older
  • They have holidays to look forward to
  • No monthly repayments
  • Flexibility to borrow more money in the future

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