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With an interest only mortgage, you borrow a lump sum secured against the value of your home. You pay interest on the loan each month, and the lump sum you originally borrowed is repaid when your home is eventually sold. You need to be able to afford the monthly interest payments out of your pension or other income. The interest rate may be fixed or variable. But if it is variable, and your pension or other source of income is fixed, you may find it more difficult to meet your repayments if interest rates rise.

Where the plan is in joint names, if both of you had to move into long term care, the plan would end, and your home would be sold and the mortgage repaid. Any balance will be distributed in accordance with any will(s) made. The plan will continue if only one of you has to move into a care home.

Where you might need to raise further funds in the future, some plans allow you to apply for a further advance or cash facility but there are circumstances in which this may be withdrawn or restricted in certain circumstances as detailed within the relevant key features document, which is an illustration provided by the Lenders. In order to take out a further advance, there would need to be enough equity in your home.

The payments shown in the Key Facts Illustration provided could be considerably different, and higher, if interest rates change In the event that your income falls, you will still have to make your mortgage payments Your home may be repossessed if you do not keep up payments on your mortgage

You may choose your own solicitor to carry out the legal work in connection with your plan. Before the plan is completed, your solicitor will be provided with full details of the plan, including the rights and obligations of both you and your lender / product provider under the contract, should you choose to go ahead. As a further safeguard, your own solicitor, who will oversee the transaction on your behalf, must sign a certificate to acknowledge that the essential features and implications of your chosen equity release plan have been brought to your attention. No equity release plan can proceed without a signed certificate.