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You Are Here: Home > Personal Finance > Equity Release > FAQs > Question
Equity Release: What is a

Fixed Repayment Lifetime Mortgage
Last update : November 2011
It is a loan taken out which in turn is secured against the value of your property. A tax free cash lump sum is then paid.

However, instead of paying interest on the loan, as with most Lifetime mortgages, you agree with the lender to pay a higher sum when the property is sold. This sum is also fixed, ie it cannot rise over time.

When the property is sold the lender must repay the loan and the remainder is their profit.

Obviously if you live a long time this style of Equity Release deal will be more advantageous to you, and better for the lender if you die within a few years signing the paperwork.
How much higher the higher sum will be depends on your age and life expectancy (if you have certified medical problems this should mean a lower price).

Overall these deals look highly subjective and personally I wouldn't recommend them. See Secret 3 - Buy simple and flexible - you can't read the future - which is one of this site's 10 Secrets to Good Personal Finance

See also


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