Drawdown lifetime mortgages

If you're looking to release an initial lump sum then have access to funds in the future as and when you need them, a drawdown lifetime mortgage might be for you. This allows you to release funds from your home in portions you control.

What is a drawdown lifetime mortgage?

A drawdown lifetime mortgage allows you to release some of the funds from your home when you need it, following an initial smaller release. This makes it a more flexible option than a lump sum lifetime mortgage.

Releasing your funds in stages has many benefits. For example, you’ll only accrue interest on the money you’ve released. It can be a more cost-effective option, as the interest you accrue, rolls up and compounds at a slower pace than if you release all the funds in one lump sum.

Like a lump sum lifetime mortgage, it’s a way of releasing some of the tax-free money from your home without having to sell up and downsize. Enjoy the freedom to access your funds whenever you need to with a drawdown lifetime mortgage.


How does a drawdown lifetime mortgage work?

  • You agree an overall sum of money you can borrow from your equity release provider. This amount is based on your age, property value and your health and lifestyle choices.
  • You’ll take an initial lump sum from the overall sum of money and the rest will be kept in a reserve facility.
  • When you want to draw down any of the remaining funds, you can release them as and when you need to, subject to criteria.
  • Interest is added to the money that you’ve drawn down, the interest rate applied will be at the prevailing interest rate at the time the money is drawn down
  • There are typically no monthly repayments to make. The full loan plus roll up interest is repaid when the plan comes to an end, which is usually when you or the last remaining applicant either pass away or move into long-term care.

Why choose a drawdown lifetime mortgage?

There are many benefits of choosing a drawdown lifetime mortgage. It is important, however, that you explore the options available to you and speak to a specialist equity release adviser about which plans most suit your circumstances.

With a drawdown lifetime mortgage, you will find that your interest may not roll up and compound as quickly as a lump sum lifetime mortgage because the interest only accrues on the funds that you release. It’s also a flexible way of accessing some of the funds tied up in your home and means you can stay in your property while making the most out of its value.

There are typically no monthly repayments with a lifetime mortgage and with plans that meet Equity Release Council standards there is a no negative equity guarantee. This ensures you'll never owe more than your home's value.


How much will it cost?

A drawdown lifetime mortgage has a fixed interest rate applied to each individual amount you release, meaning the interest rates can vary, meaning each draw down could have a different interest rate. Why not use our handy calculator to see what you could borrow. You can also speak to our experienced team, who will be on hand to help you. 

Unless you decide to go ahead, our service is completely free of charge as our fixed advice fee of £1,499 is only payable on completion of a plan. 

It’s important to remember that there may be additional costs, such as solicitors’ fees and administration fees when you set up your lifetime mortgage plan.


Ready to see if a drawdown lifetime mortgage is right for you?

Remember, you must receive expert equity release advice before you take out any equity release product. If you want to find out more you can do some of your own reading, our equity release guide is free to download and can provide you with more information.

So, if you’re ready to start exploring your options, our friendly and experienced team can be reached via our quick contact form or on 0800 188 481. Lines are open Monday-Friday 9am-5.30pm.


Things to consider with equity release

  • Equity release may involve a lifetime mortgage, which is a loan secured against your home.

  • Equity release will reduce your estate’s value and may affect your entitlement to means-tested benefits

  • A lifetime mortgage may result in limited or no property equity remaining and will reduce your financial options in the future

  • The loan, plus compound interest, is typically repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care

  • Unless you decide to go ahead with a plan, our service is completely free of charge, as our fixed equity release advice fee of £1,799 is only payable on completion of a plan