Annuity
An investment that converts a lump sum into income that is taxable.
Arrangement Fee
A commitment or administration fee that you usually pay the lender to reserve the mortgage funds.
Equity Release
A way you can benefit from the value of your home without having to move out – by borrowing against it or selling all or part of it for a regular income or a lump sum.
Home Income Plan
A loan that pays you a cash lump sum which you can use to buy an annuity to give you a monthly income – usually fixed for life. Part of the income is used to pay the interest on the loan.
Home Reversion
A type of equity release scheme. You sell all or part of your home to a scheme provider in return for a regular income, a cash lump sum or both and continue to live in your home for as long as you wish.
Lifetime Mortgage
A type of equity release scheme. A loan secured on your home which is repaid by selling your home when you die or go into long-term care.
Negative Equity
When the amount you owe the lender is more than the value of your home.