Equity Release Schemes - Drawdown Lifetime Mortgage

Drawdown lifetime mortgage


Drawdown lifetime mortgages provide a flexible approach to the release of home equity.


These plans offer control over how & when you wish to take your tax free cash. From the
outset, you will provided with a maximum cash reserve facility. Out of this, you decide how
much you initially wish to withdraw, with the remainding cash held in reserve until a future
date. This will be determined by whenever it is that you wish to take any additional funds.


Why is drawdown equity release popular?

With flexibility, comes savings. By taking a lower initial release means you will be paying less interest over the
long term & therefore ensuring there will be more funds available for your children. Additionally you benefit, as
there will be a lower future balance, meaning more cash in the pot for you to potentially draw at a later date.


Drawdown lifetime mortgages in action...

The benefits of a drawdown lifetime mortgage scheme can be felt across the retirement spectrum. One excellent
example of where drawdown proves beneficial, is for people on means tested benefits such as pension credit or
council tax benefit. By limiting the cash taken by the release of equity & keeping within benefit levels, means
that drawdown lifetime mortgages, advised correctly, can have no detrimental effect on future benefit payments.


Advantages of drawdown lifetime mortgages

The benefits of equity release schemes including drawdown mortgages are two-fold; flexibility & money saving.

The following are advantages of drawdown lifetime mortgages in comparison to a standard lifetime mortgage: -


• A drawdown cash reserve facility is created allowing withdrawals to be made whenever required

• Saves £1000's compared to standard lifetime mortgages, as they tend to have lower interest rates

• You only pay interest on the actual amount you withdraw. Not on money in the reserve facility.

• A drawdown lifetime mortgage allows you to retain 100% of the property ownership

• The minimum amount you can drawdown can be as little as £2,000 with no further admin charges

• Money from the additional drawdown facility is usually available in your bank account within 14 days


Disadvantages of drawdown lifetime mortgages

Aswell as the many positive features of equity release drawdown schemes, there are some important aspects
you also need to be made aware of: -


• The drawdown reserve facility may only be guaranteed for a certain number of years

• In the event of adverse economic conditions the lender has the right to withdraw the reserve facility

• Future drawdown of capital will be a the interest rate applicable at the time.

• There can be different tranches of money with different interest rates & early repayment charges

• Once the total cash reserve facility has been used, you will need to reapply for a further advance

• Some equity release drawdown lenders may cap the size of the maximum reserve facility


Additional equity release advice regarding drawdown lifetime mortgages can be provided over the phone or in
the comfort of your own home by our selected team of local equity release advisers.


Book your appointment today by calling FREEPHONE 0800 678 5169 & speaking to an equity release specialist.


If you wish to compare drawdown equity release schemes & latest rates, visit our Equity Release Deals section.



These are UK drawdown lifetime mortgages. To understand the features and risks ask for a personalised illustration.

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These are lifetime mortgage & home reversion plans. To understand the risk & features of these plans, request a personalised Key Facts Illustration.

CompareEquityRelease.com helps you to compare and arrange equity release schemes from the whole of the equity release market:

Aviva | Bridgewater | Hodge Lifetime | Just Retirement | LV= | more2life | One Family | Retirement Advantage | Pure Retirement L&G Crown