How to model lifetime mortgages in your LifePlan

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Lifetime mortgages are becoming a popular (and likely to become a mainstream) way to access the value locked up in the main home in order to meet retirement lifestyle requirements, repay mortgages, and pay for healthcare care later in life.

You can now model the impact of taking out a Lifetime Mortgage now, or at any time in the future. A dedicated tab in the ‘Home’ Section enables Premium Version users to model different options including interest paid in full; partial interest payments; or interest fully rolled up and added to capital. You can also model the normal Lifetime Mortgage drawdown options – full drawdown at the start, or regular drawdowns throughout the projected retirement to supplement income.

Here are some steps to follow to use this:

• 1 The Lifetime Mortgage page is accessible via the tab in the Home section.
• 2 It is strongly recommended that you obtain indicative quotes from a Lifetime Mortgage provider or intermediary before completing this section.
• 3 Follow the prompts on this page (starting with ‘Do you wish to plan a Lifetime Mortgage?’).
• 4 If you answer ‘Yes’, select an amount as an initial drawdown and the age at which this will take place.
• 5 The initial drawdown must at least equal any outstanding mortgage on your main residence. The amount necessary to repay an outstanding mortgage at the chosen age will be used to repay that mortgage and any surplus will be added to your notional investment account, earning yield and growth as specified by you in your ‘General Assumptions’.
• 6 If there is no outstanding mortgage, then you can enter any amount up to that available from your Lifetime Mortgage provider - based on home value and your age, and this can be by way of either a single drawdown or multiple future drawdowns.