Drawdown Mortgage Equity Release Calculator

Drawdown lifetime mortgages are the most popular type of equity release plan. Once the lender has calculated the maximum they will lend you, this is placed in a ‘cash reserve’ facility with them. From this, a minimum of £10,000 can be withdrawn. Any unused cash left in situ, has the advantage of not being charged interest.

After the plan has started, you are then free to borrow as much as you like and as many times as you want to – until your cash reserve is fully used up. The minimum withdrawal is typically £2,000, which means you can take smaller amounts for lower expense items, without having to take more than needed.

Once set up with the lender, the money is usually received in your bank account in a couple of weeks. As interest is only charged on the amount you borrow (not on the cash reserve), this will reduce the final amount of interest to be repaid if you borrow in a series of drawdowns over time - rather than in one large lump sum.

If you are claiming any means-tested benefits, a drawdown lifetime mortgage may not affect your claim as the amount borrowed could be managed to keep under eligibility thresholds – which your local Equity Release Supermarket adviser will be able to talk through with you in detail.