As interest rates continue to rise, many homeowners are finding it difficult to meet their new mortgage payment obligations. In response to this growing concern, Bower Home Finance is highlighting the potential benefits of utilising lifetime mortgages as a viable financial tool, as they forecast many opting for a Lifetime Mortgage as their only option to remain in their homes. The increase in those turning to Lifetime Mortgages is said to increase as far as 2026.
- A lifetime mortgage allows you to continue to live in your home
- You have protection with a no-negativity equity guarantee
- Lifetime mortgages allow you to access tax-free cash to spend on the lifestyle you want
- Some have the option of no regular payments
- Lump sum or drawdown facilities are available on a lifetime mortgage plan
A lifetime mortgage allows homeowners aged 55 and above to release equity from their property, providing an additional source of income to supplement their monthly budget. This solution offers homeowners the opportunity to tap into the accumulated value of their property without the need for immediate repayment. By accessing a portion of their home’s equity through a lifetime mortgage, homeowners can bridge the affordability gap created by increased mortgage rates, alleviating financial strain and providing peace of mind.
Geoff Charles – CEO of Bower Home Finance:
“As mortgage rates continue to rise, we are seeing a notable increase in individuals turning to Lifetime Mortgages as an option to repay their mortgage with no or optional monthly payments. This is whilst being able to continue to own and live in their homes.” says Geoff Charles, CEO of Bower Home Finance.
“With affordability becoming a significant concern, Lifetime Mortgages offer a lifeline for homeowners seeking financial stability while preserving their independence and quality of life. By unlocking the equity in their properties, individuals can access tax-free funds to support their living expenses and enjoy the lifestyle they deserve. Our proud membership of the Equity Release Council gives customers the safeguards and guarantees required.”
“It is our mission to empower homeowners with financial solutions and guide them through the process, ensuring they make informed decisions that align with their unique circumstances. We believe that Lifetime Mortgages will play a crucial role in enabling homeowners to age in the home they love, and enjoy their homes for years to come.”
Andrea Rozario – CCO of Bower Home Finance: “Amidst the challenges posed by rising mortgage rates, homeowners are increasingly turning to Lifetime Mortgages as a viable solution. The benefits of a Lifetime Mortgage are compelling – it allows you to continue living in your home, provides protection through the ‘no-negative equity guarantee,’ and offers access to tax-free cash for the lifestyle you desire. With options for no regular payments and the flexibility of lump sum or drawdown facilities, homeowners have the freedom to choose what suits their needs best.”
Rozario acknowledges the importance of seeking professional advice and emphasises, “It is crucial to consult with a member of the Equity Release Council to ensure you receive comprehensive guidance throughout the process. While Lifetime Mortgages provide valuable advantages, it’s essential to consider potential drawbacks.”
“The value of your estate may decrease, impacting the inheritance you leave behind, although certain plans may allow for equity protection. Furthermore, your eligibility for certain state benefits may be affected. It’s important to be aware of any financial penalties associated with early repayment or termination of the mortgage plan. Additionally, as the loan amount increases with compounded interest, careful consideration should be given to long-term financial implications.”
