Equity Release - Flexible Lifetime Mortgage

You can apply for our Flexible Lifetime Mortgage if:

• You are aged 55 or over
• There are a maximum of two borrowers
• You own your home in full or have a small mortgage outstanding.

To apply for our Flexible Lifetime Mortgage your property must:

• Be worth a minimum of £150,000
• Be mortgage free or have a small mortgage outstanding — in this case part of the Lifetime Mortgage must be used to repay this debt
• Be in good repair
• Have at least 70 years remaining on a lease at the outset of the mortgage
• Be in joint names on the property title — if there are two borrowers.

The term of the Lifetime Mortgage will be:

• The lifetime of the single or surviving borrower, or
• Until the surviving borrower moves into long term care, or
• Until the property is sold when the borrower moves house.

But you may be in a position to pay off part or all of your mortgage earlier — should you come into some money or a policy matures.

No you don’t — you can borrow what you need to start, then apply for further advances at a later date with no additional fees (although you will need to meet the cost of a valuation for an increased property value).

In fact, it may work out cheaper to release equity over a period of time. But there is a minimum withdrawal of £5,000 for each advance after the initial lump sum.

If, at a later date, you wish to borrow more money, this will be subject to the lifetime mortgage criteria in place at that time and will take into account:

- the age of the youngest borrower

- your existing loan balance, including applied interest if applicable

- the value of your property.

You may have to pay the cost of a new valuation and interest will be charged at whatever fixed rate applies at that time.

You can also take part of your borrowing through a Mortgage Reserve Account.

Taking out a Mortgage Reserve Account along with your Flexible Lifetime Mortgage can provide more flexibility in the way you manage your finances.

If your main mortgage is less than the maximum amount we allow you to borrow you can apply for a Mortgage Reserve Account.

This gives you the freedom to withdraw more funds (a minimum of £100 each time) as and when you wish for whatever purpose. Perhaps you want to top up your income in the short term or pay for a new car on holiday.

Remember though, interest will be charged and payable when you start to borrow money from the Mortgage Reserve Account. You can repay any borrowing in this account at any time.

You pay the interest on your loan each month, paying back the capital when your home is eventually sold.

The interest rate is variable so may change throughout the life of your mortgage. This also applies to any further borrowing which may have a different rate to the main mortgage. See Interest Rates for our current competitive rate.

If you pay off your mortgage within the first two years you will be charged for early repayment — 2% of the original loan amount.

If the loan is repaid on death or when you or the surviving borrower moves permanently into long term care, no early repayment charges will apply.

As this mortgage is portable, the early repayment charge may not be payable if you move house and take out a new mortgage with Scottish Widows Bank.

If you choose our Flexible Lifetime Mortgage's offset facility, a savings account is set up alongside your mortgage. Any money paid into that account is 'offset' against your mortgage — so, if you have a £50,000 mortgage and £10,000 savings, you will pay interest on only £40,000 of the mortgage.

This means your monthly interest payment will be lower.

For more information on offsetting take a look at How Offset works.

Scottish Widows Bank guarantees that:

• We will not — under any circumstances — ask you to pay back more than your property is worth, no matter what happens to the property value in the future. This is called a 'no negative equity guarantee'. All Terms and Conditions of the Flexible Lifetime Mortgage must continue to be met for this to apply.
• You are allowed to move house and take your mortgage with you.
• You always own your home until you move into long term care or die.
• All borrowers can remain in the property until the surviving borrower dies or moves into long term care.

A full summary of our guarantees can by found here.

Deciding to release the value from your home is a big decision and it is important that you consider independent legal and financial advice about the best way forward for you and your family.

Taking out a Flexible Lifetime Mortgage can affect what you leave as an inheritance and can also reduce your eligibility for means tested state benefits so it is important all these areas are considered fully by you.

If you take out a Flexible Lifetime Mortgage there will be a non-refundable fee of £599 which will be added to the loan arrangement.

There will be a £25 Transfer of Funds Fee added to the loan amount on completion of the mortgage.

If you repay the loan in full, there will be a Redemption Fee of £195 payable.

We have negotiated a very competitive fee structure with our surveyors — detailed in the table below.

Yes, you can view your Flexible Lifetime Mortgage using our Internet Banking service. Internet Banking allows you to:

• Check your mortgage balance.
• View details of recent transactions.

And it’s easy to register too — just complete the ‘Internet Banking’ question in your Flexible Lifetime Mortgage application form. Alternatively, please call 0845 845 0400 to register for this service. Our opening hours are 8am to 6pm Monday to Friday (Wednesday from 10am). When you call, you’ll need your Flexible Lifetime Mortgage account number. We’ll also ask you additional questions to verify your identity before setting up your access.

Scottish Widows Bank’s charges are competitive and in line with the industry standards. They are detailed in the Mortgage Rates Sheet and the Key Facts Illustration you will receive before you submit your mortgage application.

You can download a PDF of our Tariff of Charges (pdf 84k). And if you need further help please call us on 0845 845 0829 (calls charged at local rates).