Lease for Life calculator
Comparing the Lease for Life to a lifetime mortgage
In the following example a single man aged 77 purchases an apartment with a value of £100,000.
We see the outcome if he takes out a £30,000 lifetime mortgage to help him with his purchase.
We also see the outcome if he opts for a £30,000 Lease for Life discount/contribution to help him with his purchase.
The following shows the outcome after 15 years if the property goes up & also down in value.
We see the outcome if he takes out a £30,000 lifetime mortgage to help him with his purchase.
We also see the outcome if he opts for a £30,000 Lease for Life discount/contribution to help him with his purchase.
The following shows the outcome after 15 years if the property goes up & also down in value.
| LIFETIME MORTGAGE EXAMPLE |
IF PROPERTY VALUE DECREASES BY 1% PER ANNUM COMPOUND Year 15 |
IF PROPERTY VALUE INCREASES BY 1% PER ANNUM COMPOUND Year 15 |
| PROPERTY VALUE | £86, 006 | £116,097 |
| AMOUNT OF LIFETIME MORTGAGE LOAN | £30,000 | £30,000 |
| AMOUNT RECEIVED (*1) | £29,405 | £29,405 |
| LOAN INTEREST ACCRUED (*2) | £45,967 | £45,967 |
| TOTAL AMOUNT PAYABLE | £79,089 | £79,089 |
| APR (*3) | 6.6% | 6.6% |
| RESIDUAL VALUE REMAINING IN PROPERTY AFTER REPAYMENT OF LOAN | £6,916 | £37,008 |
| DAWN CHARLES’ LEASE FOR LIFE EXAMPLE |
IF PROPERTY VALUE DECREASES BY 1% PER ANNUM COMPOUND Year 15 |
IF PROPERTY VALUE INCREASES BY 1% PER ANNUM COMPOUND Year 15 |
| PROPERTY VALUE | £86, 006 | £116,097 |
| FULL ENTITLEMENT | 57.5% = £57,500 | 57.5% = £57,500 |
| AMOUNT RECEIVED | £30,000 = 52,1% entitlement | £30,000 = 52,1% entitlement |
| % RETAINED IN PROPERTY | 47.8% | 47.8% |
| RESIDUAL VALUE REMAINING IN PROPERTY AFTER LEASE FOR LIFE % DEDUCTED | £41,110 | £55,494 |
If the gentleman's apartment went down in value by 1% each year, after 15 years, by choosing the Lease for Life instead of a lifetime mortgage the gentleman would be £34,194 better off.
If the gentleman's apartment went up in value by 1% each year, after 15 years, by choosing the Lease for Life instead of a lifetime mortgage the gentleman would be £18,464 better off.
The Lease for Life - a flexible, competitive alternative to equity release - request a quote
(*1) deduction of the application fee of £595. The applicant will also have made a contribution of £130 in advance, towards the cost of property valuation.
(*2) Loan interest has been applied at a fixed rate of 6.21% per annum (correct as at 20/06/06). Interest is calculated daily and compounded monthly.
APR:
(*3) The Annual Percentage Rate defines the cost of obtaining credit. The APR takes into account the total interest payable for term of the loan, and all other payments and charges which the customer is required to make in respect of the loan. In the above example this includes a survey fee of £130. All lenders use a common formula so that comparisons on rates can be made between lenders. The APR will depend on the personal details for the borrower, the charges, the interest rates and the term of the lifetime mortgage loan.
If the gentleman's apartment went up in value by 1% each year, after 15 years, by choosing the Lease for Life instead of a lifetime mortgage the gentleman would be £18,464 better off.
The Lease for Life - a flexible, competitive alternative to equity release - request a quote
(*1) deduction of the application fee of £595. The applicant will also have made a contribution of £130 in advance, towards the cost of property valuation.
(*2) Loan interest has been applied at a fixed rate of 6.21% per annum (correct as at 20/06/06). Interest is calculated daily and compounded monthly.
APR:
(*3) The Annual Percentage Rate defines the cost of obtaining credit. The APR takes into account the total interest payable for term of the loan, and all other payments and charges which the customer is required to make in respect of the loan. In the above example this includes a survey fee of £130. All lenders use a common formula so that comparisons on rates can be made between lenders. The APR will depend on the personal details for the borrower, the charges, the interest rates and the term of the lifetime mortgage loan.