Lifetime Mortgages

Example of a Lifetime Mortgage
Sir Toby Green takes out a Lifetime mortgage for £45,000 with a fixed interest rate of say, 7%
Sir Toby Green passes away (sadly) 10 years later and his property is sold
The lender gets back his original loan value, £45,000 plus interest of £43,522.
Any value in the property above £88,522 when it's sold is left to John's beneficiaries 

It can only be a good idea if Sir Toby Green has no savings and doesn't give a flying monkeys about his beneficiaries.
I guessed the interest rate there but i think it close to the going rate and the lender, imo is taking the piss a bit.

sold to *Sir Toby Greens beneficiaries
:) good job I didn't use a surname there

Thank you Banwana.

So your not a fan clearly.

The actual amount I would be looking for would be 15k and being the 'right' side of 60 would optimistically think I might live possibly another 20 years max.

On your figures it would seem that they would be wanting about 45k upon my demise

That would still leave a reasonable amount of equity to my beneficiaries given some increasein house prices during that period.

Having worked hard for years to become mortgage free I do not particularly like the idea of a bank taking an interest again in my property and it is massively good business for the lender but needs must where the devil drives I suppose.

Toby, I 'specialise '  in this area. They are not for everyone but sometimes a need for others. My suggestion is talk to the family (if you wish) and tell them your potentail intentions. You will be restricted on what you may borrow dependent upon age and your house value. Remember also that you would hope over 20years your property will have increased in value.

basics

Many thanks for your reply

Presumably my guess of 45k is about right which is not great but as you say the price will hopefully go up at some point so it repairs the 'damage' to some extent in the long term.

Having said that the house prices in this neck of the woods have actually gone down approximately 10k in the last two years so its hard to be too optimistic

Would there be a problem if I decided to sell in say five years and could you recommend where I can find the best deal in terms of set up fees and lower interest rates?

Are there any massive pitfalls to be wary of I wonder ?

It seems a better option than the leaseback arrangement

depending on your circumstances there may be a more creative way eg. you sell the property at market value to your kids and pay them rent from the cash or investments to cover their mortgage.