We use essential cookies to make our website work properly when you visit us. We’d also like your consent to set other non-essential cookies to help us improve our website and tailor the marketing you see.
A drawdown is a type of lifetime mortgage, allowing you to release smaller amounts after your initial release. This allows you to release funds from your home in portions that you control.
Only releasing your funds as and when you need them can be beneficial, for example, you’ll only pay interest on the money you’ve drawn down. It can often be a more cost-effective option, as the interest may accrue at a slower pace than if you take out all the funds in one lump sum.
Similar to a lump sum lifetime mortgage, it’s a way of releasing tax-free money from your home without having to sell up and downsize. Enjoy the freedom to access your agreed funds whenever you need with a drawdown lifetime mortgage. It's important to note that a drawdown facility isn't guaranteed as the lender has the option to withdraw it.
You agree an overall sum of money you would like to borrow from your lifetime mortgage provider. This is based on your age, property value and sometimes, your health and lifestyle choices.
You’ll release an initial lump sum from the overall amount of money.
When you want to draw down any of the remaining funds, you can release them in small amounts as and when you need.
Drawdowns are subject to the prevailing fixed interest rate at the time of withdrawal - which could be higher or lower than the initial release.
There are typically no monthly repayments to make as the loan, plus roll up interest, is usually repaid through the sale of the property when the plan comes to an end.
There are benefits and drawbacks of choosing a drawdown lifetime mortgage over other methods of equity release. It is important, however, that you explore all the options available to you and speak to a specialist equity release adviser about which option suits your situation.
With a drawdown lifetime mortgage, you will find that your interest may not mount up as quickly because you’re only paying it on the funds that you release, rather than the total amount in your facility. With a lump sum lifetime mortgage, you pay interest on the full amount from the start.
There are no monthly repayments on a drawdown lifetime mortgage either, and the no negative equity guarantee protects you and ensures your beneficiaries will not be left with a lifetime mortgage debt.
However, it’s important to remember that a lifetime mortgage may leave you with limited or no property equity remaining, and it’ll reduce your financial options in the future.
Your specialist equity release adviser will explain:
Your equity release adviser will also outline the following important things to think about:
A drawdown lifetime mortgage has a fixed interest rate on each sum of money you borrow. The total loan and compound interest is usually repaid once you pass away or move into long-term care. Drawdown lifetime mortgage interest rates can vary, the initial release will be at the interest rate set at the time and then any future drawdown interest rates will be at the prevailing rate.
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.
It’s important to remember that there will be additional costs, such as solicitors’ fees, admin fees and The Equity Release Experts advice fee.
Remember, you must get advice before you take out any equity release product. If you want to do some more 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 4812.
Unless you decide to go ahead, our service is completely free of charge as our fixed advice fee of £1,999 is only be payable on completion of a plan.