The main difference with a drawdown
plan is that you don't request the full sum of money available to you immediately.
Instead, you decide on a maximum amount of equity you want to release, and 'drawdown'
the cash in stages when you want to. Advantages of a Drawdown Lifetime
MortgageYou can drawdown cash by making withdrawals as and when you
need them, or you may be able to request a monthly income.
You only pay interest
on the amount of equity released, so interest could accumulate more slowly than
with a regular lifetime mortgage. You are in control of your money as you
can release cash when it suits you
You retain full ownership of your home. Drawdown
plans may be available to younger people (aged 55+)
Some drawdown plans let
you guarantee an inheritance for your family.
All equity release schemes are
regulated by the Financial Services Authority, including drawdown plans.
Disadvantages
of a Drawdown Lifetime Mortgage
Interest rates are usually higher on
a drawdown plan than they are on a standard lifetime mortgage.
If you want
to increase the amount of equity released beyond the original amount agreed, you
would normally have to apply for a further advance, which is not guaranteed. There
are restrictions on the minimum amount you can release.
The amount you can
leave as an inheritance will be reduced.
The interest applied to the drawdown
mortgage can grow quickly as it is compounded. You can't usually raise as
much money through equity release with a drawdown lifetime mortgage as you could
with a reversion plan, especially at younger ages. If you repay the lifetime
mortgage loan early, you may have to pay an early repayment charge | 
