Lifetime mortgages
Lifetime mortgages involve the taking out of a mortgage secured against the value of the home. There are no monthly repayments and interest is rolled up over the life of the loan and repaid upon leaving for long-term care or death, at which point the property is sold and the lender repaid. Interest can be fixed or capped. One aspect is that the loan can increase as interest is added over time to greater than the value of the property, although SHIP's member schemes offer a no-negative-equity guarantee.
Safe Home Income Plans (SHIP's) are the industry watchdog for these type of products. They recommend certain standards of practice and values which members must adhere to.
This is a lifetime mortgage. To understand the risk, ask for the personalised illustration.