Equity Release Schemes - Enhanced Lifetime Mortgage

Enhanced lifetime mortgage


The Enhanced Lifetime Mortgage plan has been developed with ill-health in mind.


Equity release companies have now taken flexibility one step further by considering health as a major factor in determining which is the best equity release deal, based on an individual's needs.

So much so, people with a history of poor health can now benefit from their ailments. This can benefit the individual in three ways; a larger upfront equity release lump sum, an increased drawdown facility for the future, or a lower interest rate.


Do I qualify for an Enhanced Lifetime Mortgage?

Rationale for this type of specialist equity release scheme, lies in the medical information provided by the applicant. Using underwriting techniques similar in principle to enhanced annuity plans, equity release actuaries will assess the potential longevity of each applicant on a case-by-case basis. 


Primarily, the information is gathered following completion of a health & lifestyle questionnaire. This document varies between lenders, and so can the potential benefits, hence it's important to obtain the services of an independent equity release adviser who can find the best enhanced lifetime mortgage for you.


There is similar criteria with the enhanced lifetime mortgage with regards to criteria than most equity release schemes. The minimum age for an enhanced terms is age 55, with the minimum property value being £75,000 and the smallest equity release amount is just £15,000.


How does the enhancement affect the plans?

There are three ways in which the calculated enhancement can benefit the individual. Therefore, during a meeting with your equity release adviser it is important to establish exactly what you are looking for from your lifetime mortgage. Is it a maximum lump sum, flexibility, inheritance protection or just future access to a large drawdown facility. These questions & subsequent answers will determine the best enhanced lifetime mortgage for your circumstances: -


1. Increases the size of the maximum equity release lump sum - using the health & lifestyle questionnaire, the lender will establish the severity of the medical conditions. In essence, the more severe the illnesses have been, the greater the maximum lump sum that is awarded. Use the enhanced equity release calculator to find your maximum lump sum.

TIP! - Ideal for those wanting maximum possible equity release to clear debts, interest only mortgage etc.


2. Can lower the standard equity release interest rates - with certain providers, the enhancement can work in the opposite direction. For instance the Aviva Flexible Lifetime Mortgage will reduce the interest rate below standard terms for those NOT taking the maximum release & qualify for enhanced terms.

TIP! - Ideal for those looking for the lowest possible interest rate & wish to use enhanced terms to achieve this.


3. Increase the size of the drawdown facility available - should qualification for enhanced terms be accepted & the maximum initial release was not required, then some lenders will instead enhance the size of the future drawdown facility above those of the standard terms would allow, then more2life's enhanced plan could be of service

TIP! - Ideal for those looking for the security of having the largest possible reserve facility to access into their retirement.


What medical information would help the application?

All enhanced equity release companies will require completion of a health & lifestyle questionnaire which will help the lenders actuaries determine the severity of any enhancement due. Therefore, if ill-health has existed, or still persists, then any information regarding how long such an illness has existed, or even the medication taken would help greatly.


As an example, enhanced equity release companies such as Just Retirement would require the last blood pressure reading and also question the longevity of any illness that has been disclosed. Your equity release adviser would always assist with any information needed to support your equity release application.


Following submission of the enhanced lifetime mortgage application, the lender will invariably contact your doctor for a medical report which will hopefully confirm the information already provided. In some instances, where being a smoker has been declared, they can ask for a nicotine test by using a remote nursing practice who would usually visit you at home.


Once the report is received by the equity release provider then the offer can be confirmed, or amended dependent upon the results therein. The enhanced lifetime mortgage application can then proceed to completion via the legal process involved.


Which companies offer enhanced equity release schemes?

The history of the enhanced equity release market has been laden with companies temporarily introducing impaired-life mortgage plans, & then withdrawing them, without sufficient continuity. This has applied also to impaired home reversion schemes where Partnership Assurance & Hodge Lifetime possibly had the longest duration.


However, the market has since learnt possibly from the impaired annuity market & it's from this actuarial background that the current crop of enhanced equity release providers can be found. There are now four companies that offer enhanced equity release schemes for those with adverse health conditions.


This included the first of the latest ill-health equity release providers which was Partnership, with a fees free product to enter the market with. Partnership were later joined by More2life whom they also funded, and Aviva with their own enhanced option via their Lifestyle Flexi & Lump Sum Max products. Latterly Just Retirement  introduced a Lump Sum Plus product which has the ability to accept both good & impaired life applicants onto its plan.


Advantages of enhanced lifetime mortgages

The benefits of impaired equity release schemes can be three-fold and the following are scenarios of how these changes to standard terms can affect everyday retirement needs: -


• When ill-health is usually an impairment, enhanced equity release helps make poor health work in your favour

• Release a greater tax-free lump sum as opposed to conventional equity release plans.

• Provide equity release solutions if repaying an interest-only mortgage, where lenders are demanding repayment

• If a minimal release is required, then enhanced plans offer lower interest rates, thus improving your inheritance

• Consolidate an impaired drawdown lifetime mortgage to future proof an enhanced equity release facility

• Option to include an inheritance protection feature, thus guaranteeing a portion of the property on eventual sale


Disadvantages of the enhanced lifetime mortgage

However, with any equity release scheme, there must always be a degree of caution where a roll-up lifetime mortgage is concerned, hence we highlight the following: -


• Having a larger release available, the compounding effect will be greater than any standard lifetime mortgage

• Interest rates tend to be much higher for the ill-health equity release schemes

• Any drawdown facility of enhanced terms usually has a withdrawal fee applicable

• Completion times on impaired life plans can take longer dependent upon receipt of doctors medical report

• There will be less chance of remortgaging away at a later date due to the enhanced roll-up effect over time


Further specialist advice regarding enhanced equity lifetime mortgage plans can be provided over the phone or in the comfort of your own home by our equity release UK team of qualified consultants.


Book your appointment today by calling FREEPHONE 0800 678 5169 & speaking to an equity release specialist. If you wish to compare impaired equity release schemes & the latest rates available, visit our Enhanced Lifetime Mortgage Deals section.


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These are UK lenhanced ifetime mortgage schemes. To understand their 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