Drawdown lifetime mortgage A drawdown lifetime mortgage is a type of equity release plan that enables you to take cash from your home in chunks, as and when you need it. What is a drawdown lifetime mortgage?You’ll get an initial lump sum followed by an approved cash facility that you can ‘draw’ from as and when you like. There will be a minimum amount that you can draw down at any one time – this is set by the lender and may vary depending on which plan you take.Unlike a lump sum lifetime mortgage interest is only charged on the cash which you have drawn down, meaning this can be a cost-effective method of borrowing.When you want to draw down more cash you will apply directly to the lender – usually it takes a couple of weeks for the money to land in your bank. The interest rate associated with subsequently drawn tranches will be the prevailing rate at the time.See how much you could borrow with a drawdown lifetime mortgage. Calculate amount Drawdown versus lump sumHere are some of the reasons why you may wish to consider a Drawdown Lifetime Mortgage over a Lump Sum:Don’t pay interest on funds until drawn down – interest is only added to the amount you draw down, not on your available balanceSecurity for the future – you have the peace of mind knowing that the money is there, should you need it in the future (although this is not guaranteed)More flexibility – you can release cash from your reserve as and when you need itGreater control – you can organise your finances in a way that won’t affect your means-tested welfare payments and benefits. Getting started Get a quick quoteUse our free equity release calculator to find out in less than a minute if you qualify and how much you could release. Calculate now Speak to an adviserBook a free Fact Find call to find out from an experienced Equity Release Adviser if equity release is right for you. A fee of £1,695 is payable only if you choose to proceed and your case completes, and can be added to your loan. Book adviser call FAQsIt’s important that you fully understand equity release before taking out a plan. Find out more Types of lifetime mortgagesA drawdown lifetime mortgage isn’t your only option. Here’s three other types of lifetime mortgages that your adviser will consider for you depending on your individual circumstances: Roll-up lifetime mortgageA roll-up lifetime mortgage – also called a lump sum lifetime mortgage – enables you to take a lump sum of tax-free cash and typically no repayments are made. This means the interest is added to the loan amount and the balance grows (compounds) over time. Explore roll-up Enhanced lifetime mortgageAn enhanced lifetime mortgage – also known as an ‘impaired’ lifetime mortgage – enables you to release more tax-free cash from your home, by taking into account your health and lifestyle choices. Put simply, the poorer your health, the more you can borrow. Explore enhanced Interest only lifetime mortgageAn interest only lifetime mortgage is a relatively new kind of equity release plan where you can pay the interest due on a monthly basis. This means the size of your loan never goes up, making them an increasingly popular option for over-55s. Explore interest only Frequently asked questions about drawdown lifetime mortgages Do I qualify for a drawdown lifetime mortgage?To qualify for a lifetime mortgage you must be over 55 and a UK homeowner with a property worth at least £70,000 – both if in a couple. If you have an existing mortgage you must repay the outstanding balance with the money released and your property must be ‘mortgageable’ in the eyes of the lender (like with a traditional mortgage). A drawdown lifetime mortgage might be perfect for you if you don’t need all of the money you release straight away but want to have it there. Check eligibility What happens when I want to draw down money?When you take out your drawdown lifetime mortgage your will usually take a lump sum and then leave a pot of cash (called a reserve) with your lender. When you want to access this money you go straight to your lender, not your adviser. They each have their own processes but usually it will involve getting your request to withdraw funds in writing and then they will transfer the cash directly into your bank account. There is usually a minimum amount you can request each time. Speak to an adviser What are drawdown lifetime mortgage interest rates?Each drawdown lifetime mortgage lender sets their own rates which vary by plan and loan-to-value. With so many plans across the whole market rates change constantly and sometimes daily. With more lenders offering drawdown lifetime mortgages average interest rates are competitive – to get your personalised rate you need to speak to an adviser. When thinking about a drawdown lifetime mortgage it’s important to consider features as well as rate, which our advisers will always do. Get a personalised rate Is a drawdown lifetime mortgage the right option for you?A drawdown mortgage might seem like a good option if you want some extra money and don’t want to move house. However, there are some important ‘Things to think about‘. You need to look at how it will affect your future choices and financial situation in later life too.Our friendly advisers can help you to explore drawdown lifetime mortgages – and the alternatives – without it costing you a penny. Only if you decide to go ahead we charge an advice fee of £1,695, payable on completion, and this can be added to your loan.Your adviser will be able to explain how:A drawdown lifetime mortgage is a loan secured against your home. It will reduce the value of your estate and may affect your entitlement to means-tested benefits now or in the futureCompared to some other types of lifetime mortgage interest rates can be slightly higher with a drawdown planDifferent interest rates can apply each time you draw down cash – depending on the prevailing interest rates at the time this may be greater than your initial rateThere can be limits to the number of times money can be released in a certain period and how much you can withdraw at a timeIf you want to pay off the loan early repayment charges (ERCs) can be substantialFurther amounts aren’t guaranteed – if you want to increase the total amount of equity you have agreed to drawdown over a specific period, you’ll have to apply for a further advance Speak to an adviser