The choice between whether to take a single lump sum or regular payments can be difficult to make. A solution that compromise between the two approaches is the Drawdown Lifetime Mortgage.

A drawdown scheme allows homeowners to take an initial lump sum, with extra money in a cash reserve. This cash reserve can then be taken out or “drawn down” at will.

The benefit of a drawdown mortgage is that you will only pay interest on the money which you have taken out. You are not charged interest on any undrawn balance remaining in the cash reserve.

There can be downsides to a Drawdown Lifetime Mortgage. One disadvantage is that the total amount you can borrow is usually lower than on a normal single-advance Lifetime Mortgage.

Every time you take money out of your cash reserve, you will likely be charged at current interest rates. This rate may differ from the initial advance, which can make it a little more difficult to keep track of how much you will be charged.

Sometimes known as an ‘Impaired Lifetime Mortgage’, a lender will rely on an assessment of your health and lifestyle.

If they believe you are ‘impaired’ you may be able to borrow more than a normal equity release plan.

Lenders will look at your medical records, and they may also require you to answer their own questionnaire.