Lump sum and drawdown

A lifetime mortgage commonly known as Equity Release is a way for homeowners aged 55 and over to release some of the value tied up in their home. However there are different ways that you can receive your tax-free funds, by either taking a lump sum and/or a drawdown. So why not let Lifelink help you work out the approach that’s most suitable for you and your personal circumstances.

Your lifetime mortgage options

Lump sum lifetime mortgage

With a lump sum lifetime mortgage, it really does what it says. If you choose to unlock some of the value in your home with a lump sum lifetime mortgage, you will receive your tax free funds in one lump sum.

Drawdown lifetime mortgage 

If you decide on a drawdown lifetime mortgage, you are setting up a facility that you can access as and when you need it. After agreeing an overall facility you will receive an initial release of tax free funds, you can then drawdown additional amounts from the remainder as and when you need it (subject to minimum amounts).

This can be the most cost effective solution for homeowners who do not require all the funds in one go.

Helping you make the right choice

At Lifelink we are here to help you make the choice that suits your personal circumstances, everyone is different and so are their aspirations, we will ensure our advice is tailored to best suit you.   

Is a lump sum lifetime mortgage right for you?

These are some of the benefits of a lump sum lifetime mortgage;  

Switching an existing plan to a cheaper interest rate to reduce total overall debt.

Interest rates on both lump sum and drawdown lifetime mortgages are fixed for life, meaning you will not be effected by any interest rate hikes.

  • Tax Free cash to use any way you like. 



The benefits of a drawdown lifetime mortgage 

Lump sum mortgages may not suit everyone, if you are looking to supplement your income, it is better to drawdown funds as and when required, meaning the debt will increase at a much slower rate as you will only be charged interest on the funds actually drawn down and not on the total facility.

  • Lower overall cost: You’ll only ever pay interest on the amount you drawdown, which means the interest will increase at a much slower rate reducing the total amount owed.
  • Means Tested Benefits, by taking a drawdown mortgage it may be possible to drawdown funds that reduce the impact on any means tested benefits that you may be entitled to or already receiving.

Both options also share a number of benefits too. By either taking a lump sum or deciding on a drawdown option, you’ll still own your home and you’re still free to move home – providing the property you wish to move to meets the lenders criteria at that time. Typically, with both plans there are no monthly repayments.

Taking everything into account

If you’re not sure if a Lifetime Equity Release mortgage is right for you, talk to one of our expert equity release advisers by calling Lifelink on 01189 349800 for your free consultation and receive expert advice you can trust.

All mortgages are secured against your home and careful consideration must be given before entering into any form of Equity Release, listed below are a few important highlights to consider;

 You’ll be given a recommendation that you can consider in your own time. Our advisers are here to make sure you know exactly what’s what if you’re thinking about releasing equity.


Lump sum lifetime mortgage

  • Higher total cost: The effect of compound interest on a lump sum plan can quickly increase the amount owed at the end of the mortgage.
  • Less flexibility: Should you require additional funds you will need to apply for a further advance which is not guaranteed.


Drawdown lifetime mortgage

  • Lenders have the right to withdraw this option in unforeseen circumstances.
  • The interest rate charged to drawdowns will be the current rate at the time of the drawdown which could be higher or lower than your initial interest rate.



  • If you’re not sure if a lump sum or drawdown plan is right for you, talk to one of our expert equity release advisers – call Lifelink on 01189 349800 for a free consultation and receive expert advice you can trust.