Lifetime Mortgage
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What is a
lifetime mortgage?
A lifetime mortgage is available to anyone over 55 and is used to purchase a new property or release funds from your existing home. They are for people looking to borrow funds on a lifetime basis, with interest rates fixed for life.
With a lifetime mortgage, you will still keep ownership of your property. The loan is repaid once you die or when or if you go into full-time care, or your plan may allow you to pay the funds back early.
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What customers say
Don't just take our word for it, hear what our customers have to say...
Extremely helpful
They were extremely helpful with my recent equity release. They sorted everything out for me and kept me up to date with weekly phone calls. They were extremely pleasant and friendly. They made the whole process very simple for me.
Charlotte Harris
Top service
Top service provided and equity release completed very quickly, would recommend for anybody to use the service to arrange equity release for them.
Barry Stones
First-class
Our adviser was first-class, making everything clear and concise. So we knew exactly how to proceed with our proposed equity release. The support from head office was also excellent throughout the whole process.
David Alexander
Very professional advice
Very professional advice, and ended up with a very good deal, which my research has indicated is the best currently available.
Claire Norton
Helpful at all times
Everything fully explained so you are always kept in the loop. They don't try and rush you or push any product on to you they just give you their advice. Very friendly and helpful at all times.
Connor Davis
Stress-free experience
The process of obtaining equity release has been a stress-free experience with a friendly and efficient service and carried out in a most professional manner.
Deborah Matthews
Answering your questions
Still unsure of a few things? We've got you covered with a few simple answers to some of our most frequently asked questions.
A lifetime mortgage is a popular type of equity release, where you take out a secured loan on your mortgage, which is repaid when you die or go into long-term care. Lifetime mortgage equity release comes with a range of flexible options, such as taking out lump-sum or opting for a drawdown facility. Depending on your health, you could also be eligible for an enhanced lifetime mortgage, and you can choose between paying the interest in monthly repayments or go for an interest-roll up option.
A lifetime mortgage is a type of equity release scheme. There are two main types of equity release schemes, which are lifetime mortgages and home reversion plans. With a lifetime mortgage, you retain full ownership of your home until the term of your mortgage ends, whereas you sell part or all of your home and remain in the property with a home reversion plan. There are many variations of lifetime mortgages, such as a drawdown lifetime mortgage.
With a lifetime mortgage, you borrow money secured against the value of your home. You get to keep ownership of your home and can receive up to 25% tax-free cash. Interest is charged on whatever you borrow, which you can pay in monthly installments or add to the total loan amount.
You can ring-fence some of the value of your property as an inheritance for your family. The loan is repaid by selling the home when you die or move into long-term care. Or, you can use your estate to pay off the loan without selling the property if that's possible.
If your home is sold to pay off the loan, then any money left over after paying off the loan will go to your beneficiaries.
Equity Release Council makes it standard practice that equity release plans have a no-negative guarantee. This protects your beneficiaries from paying any money if the value of your property doesn't cover the full amount of the loan.
How much you can release with a lifetime mortgage depends on several factors: including the age of the youngest homeowner (you must be 55 and over), the value of our property and where you live. You must own your own home and be a UK resident. You can typically borrow between £10,000 to £800,000, depending on the equity in your home. For an accurate quote, use our free lifetime mortgage calculator.
To be eligible for a lifetime mortgage you must meet the following criteria:
- Be aged 55 or over. If you apply for equity release as a couple, the youngest applicant on the deeds of the property must also be 55 or above.
- Be able to pay off any outstanding mortgage or debts secured on the property with the funds raised from equity release.
- Own your own home in the UK, with a value of £70,000 or more.
- If the property title is leasehold, as opposed to freehold, the minimum remaining lease must be 75 years or more.
- Be a UK resident.
Although lifetime mortgage providers offer various flexible options, such as lump-sum or drawdown, or a mixture of both, there are two main ways to repay the loan.
An interest-paying mortgage: this means that you choose an equity release plan that allows you to make monthly or ad-hoc repayments to pay the interest and prevent compound interest. Some lifetime mortgage plans may even allow you to pay off some of the borrowed capital.
An interest roll-up mortgage: this means that you have zero monthly repayments, and any interest that builds up throughout the lifetime mortgage is paid when you die or move into long-term care.
As with a regular mortgage, there may be additional costs to consider when setting up a lifetime mortgage. However, any initial advice or information you receive from our selected advisers is completely free and without obligation. Only if you choose to proceed and your case completes will you pay an advice fee. Other costs you may need to consider are:
- Legal fees and valuation fees
- An arrangement fee to the lender
- A completion fee (which can be paid at the point of completion or added to your lifetime mortgage)
- Solicitor fees
- Early repayment charges
You will be made aware of all fees by your equity release adviser before you agree to take out a lifetime mortgage.
At the moment, the average interest rate across all lifetime mortgages is the lowest it's ever been at 3.95%, down from 4.49% this time last year. However, depending on your circumstances, there are many plans available with competitive rates. Your total interest at the end of your lifetime mortgage will depend on your interest rate and whether you have opted for a roll-up lifetime mortgage - meaning your interest will compound each month. You can always choose to pay the interest in monthly installments using an interest-only lifetime mortgage.
Do you already have a lifetime mortgage plan?
Switching your existing lifetime mortgage plan could potentially save you thousands. Equity release rates have recently fallen to record low levels meaning you could benefit from a more competitive plan. You could also access more tax-free cash and new features with more than 700 plans now available.
Our selected advisers are ready to start your free review without any obligation to proceed, so get in touch today.
Other equity release plans available
Drawdown lifetime mortgage
Interest-only lifetime mortgage
Home reversion
Get in touch
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