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Drawdown schemes are a welcome innovation to the equity release market and are a popular method of releasing equity in stages, only drawing down the funds that you require at that time, and therefore only being charged the interest on what you have drawn down so far.
Drawdown schemes are based on the principle of ‘roll-up’. However, rather than taking funds in a single withdrawal, drawdown enables you to take it in stages.
This is achieved by the creation of a reserve facility, which holds additional funds for future use. In addition to the above features, drawdown plans have the following advantages/disadvantages:
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.