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Choose lifetime mortgage with care

Date: Wed, 27 Apr 2005

Consumers are being advised to make sure they choose a lifetime mortgage that suits their needs.

At present, some schemes actively encourage homeowners to release unnecessary large sums from the equity in their home, which could mean customers paying out large amounts in interest.

Meanwhile, other lifetime mortgages request that clients take the maximum amount possible for their age and then charge excessive fees if customers wise to increase their borrowing at a later stage.

Andrew Goodsell, a financial expert, said: "Anyone considering a flexible drawdown product should make sure they fully understand the product and the implications of withdrawing more equity from their property than they need."

Lifetime mortgages are becoming increasingly popular and allow homeowners to release equity to make home improvements or support the purchase of cars or holidays.

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