lifetime mortgage?

thegentleway

Just been playing with MSE mortgage best buy and was suprised there are lifetime mortgages. I didn't know they did this in the UK. You can get 2.3% with 70% LTV with Hickley and Rugby, ERCs for first 2 years and you can overpay. This seems too good to be true, what's the catch?

K_S

@gentleway In this case 'lifetime' refers to the discounted-rate applicable for the lifetime of the mortgage term. So the rate will be 3.89% less than the H&R SVR for the entire term, which can be varied at H&R's discretion.

thegentleway

K_S said:

@gentleway In this case 'lifetime' refers to the discounted-rate applicable for the lifetime of the mortgage term. So the rate will be 3.89% less than the H&R SVR for the entire term, which can be varied at H&R's discretion.

Thank you for explaining. I searched for "fixed" and Kensington do 3.09% at 60% LTV with ERC throughout most of the term, which makes more sense.

Sweet spot seems to be at 75% LTV where you can get 2.3% for 7y and 2.49% for 10y.

When it says 10% overpayment, is that per year?

K_S

thegentleway said:

K_S said:

@gentleway In this case 'lifetime' refers to the discounted-rate applicable for the lifetime of the mortgage term. So the rate will be 3.89% less than the H&R SVR for the entire term, which can be varied at H&R's discretion.

Thank you for explaining. I searched for "fixed" and Kensington do 3.09% at 60% LTV with ERC throughout most of the term, which makes more sense.

Sweet spot seems to be at 75% LTV where you can get 2.3% for 7y and 2.49% for 10y.

When it says 10% overpayment, is that per year?

@thegentleway Kensington has some really good term fixes. The ERCs are extremely punitive but they allow porting, rates are reasonable, they offer a very generous overpayment allowance and affordability stress tests are based on the actual fixed rate so often allows clients to borrow more than they could with other lenders.

If you are referring to the Flexi Fixed For Term products, it is indeed an annual overpayment allowance (of 10.00% of the balance of the original amount borrowed) and it resets every year from the date of completion.

thegentleway

K_S said:

thegentleway said:

K_S said:

@gentleway In this case 'lifetime' refers to the discounted-rate applicable for the lifetime of the mortgage term. So the rate will be 3.89% less than the H&R SVR for the entire term, which can be varied at H&R's discretion.

Thank you for explaining. I searched for "fixed" and Kensington do 3.09% at 60% LTV with ERC throughout most of the term, which makes more sense.

Sweet spot seems to be at 75% LTV where you can get 2.3% for 7y and 2.49% for 10y.

When it says 10% overpayment, is that per year?

@thegentleway Kensington has some really good term fixes. The ERCs are extremely punitive but they allow porting, rates are reasonable, they offer a very generous overpayment allowance and affordability stress tests are based on the actual fixed rate so often allows clients to borrow more than they could with other lenders.

If you are referring to the Flexi Fixed For Term products, it is indeed an annual overpayment allowance (of 10.00% of the balance of the original amount borrowed) and it resets every year from the date of completion.

Thank you, that's really helpful.