Drawdown Lifetime Mortgage for a Widow Funding Ongoing Living Costs
£180,000 facility (£60,000 initial draw) · Lifetime · 5.70% fixed for life (MER). A 74-year-old widow in Dorset had a home worth £530,000 and a state pension supplemented by a small widow's pension.
The Client
74-year-old widow
The Challenge
A 74-year-old widow in Dorset had a home worth £530,000 and a state pension supplemented by a small widow's pension. She was managing but wanted to improve her monthly financial comfort and have a reserve for unexpected costs - home repairs, health needs - without committing to a large lump sum that would accrue interest unnecessarily.
Our Solution
Doulton arranged a drawdown lifetime mortgage with a total facility of £180,000, of which £60,000 was drawn initially. The remaining £120,000 sits in a reserve facility, accruing no interest until drawn. Only the drawn funds accrue the fixed monthly equivalent rate. Independent legal advice was obtained and the Equity Release Council's standards were met.
The Outcome
Initial draw immediately improved monthly financial comfort. The reserve facility provides reassurance for future needs. Only £60,000 is accruing interest. Family fully informed and supportive. The widow has subsequently drawn a further £15,000 from the reserve for a bathroom adaptation. Key highlights: Drawdown structure - only drawn funds accrue interest; £120,000 reserve available for future needs at no current cost; Family informed and supportive - ERC standards met throughout.