Regular Committed Interest Payments

There’s also the option with some lenders, to make regular committed payments of interest, just like an earlier life Interest Only mortgage. The advantage is, just like an Interest Only mortgage, the debt will not increase over the years, but neither will it decrease.

You can choose to service the whole of the interest payment or a portion of it. Your choice, whatever you’re comfortable with. Be aware though, once you’ve made your decision you can’t change the amount later, and you’re not normally allowed to reduce the capital outstanding.

You can decide at any time to stop making the payments and that’s fine. The mortgage will then revert to a standard rolled-up interest Lifetime Mortgage. From this point, your plan’s likely to allow ad-hoc payments, again subject to terms and conditions. This means you could probably start overpaying and reducing the capital outstanding as well as servicing the debt. Note that subject to terms and conditions, the rate of interest being charged may go up when you stop regular payments.

Again, I must stress the need to consult your formal Illustration, KFI document for the exact details of your plan and full terms and conditions.