Enhanced lifetime mortgage

An enhanced lifetime mortgage enables you to release more tax-free cash from your home, by taking into account your health and lifestyle choices.

 

Access more cash with an enhanced lifetime mortgage

Enhanced lifetime mortgages – also known as ‘impaired’ lifetime mortgages – enable you to release more cash from your home.

Based on your answers given to a health and lifestyle questionnaire you may qualify for a higher loan-to-value (LTV). Put simply, the poorer your health, the more you can borrow.

You don’t need to be ‘ill’ to qualify, any of these factors could mean you are given a larger amount of cash from your release of equity.

  • Being a smoker
  • Your body mass index (BMI)
  • Having high blood pressure
  • Taking prescription medication
  • Suffering from diabetes
  • Medical problems such as angina, heart attack, stroke, cancer
  • Multiple sclerosis or Parkinson’s disease
  • Retiring early due to ill health

This list is by no means exhaustive, and any health and lifestyle factors are worth mentioning to your adviser.

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Features of an enhanced lifetime mortgage

Like with a lump sum lifetime mortgage, enhanced lifetime mortgages are designed to release built-up equity in your home.

Here are some of the features:

  • Release more cash – the premise behind the enhancement is a lower life expectancy, so the more severe your health history, the more money you get.
  • Live in your home for life – you and any other homeowners have the right to live in your home (rent free) until you pass away or move into long-term residential care.
  • Take the cash as you need it – your adviser can help you chose between a lump sum or drawdown lifetime mortgage.
  • Get a fixed rate for life – interest rates have dropped in recent years with many plans now below 4%. This is can be fixed for the life of the plan.
  • Still provide an inheritance – to be sure of leaving an inheritance for your loved ones some plans enable you to protect a percentage of your property.
  • No negative equity guarantee – no debt can be passed on to your beneficiaries as whatever happens to the value of your home you can never owe more than the price it’s sold for.
  • Repayments your way – with some plans you can make payments to reduce interest, but there are typically no monthly repayments to make.
  • Spend the money however you like – you can use the money you have already paid into your mortgage to boost your retirement income.

Getting started

Get a quick quote

Use our free equity release calculator to find out in less than a minute if you qualify and how much you could release.

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Speak to an adviser

Book a free Fact Find call to find out from an experienced Equity Release Adviser if equity release is right for you.
A fee of £1,695 is payable only if you choose to proceed and your case completes, and can be added to your loan.

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FAQs

It’s important that you fully understand equity release before taking out a plan.

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Types of lifetime mortgages

An enhanced lifetime mortgage isn’t your only option. Here’s three other types of lifetime mortgages that your adviser will consider for you depending on your individual circumstances:

Roll-up
lifetime mortgage

A roll-up lifetime mortgage – also called a lump sum lifetime mortgage – enables you to take a lump sum of tax-free cash and typically no repayments are made. This means the interest is added to the loan amount and the balance grows (compounds) over time.

Explore roll-up

Drawdown
lifetime mortgage

A drawdown lifetime mortgage is a type of equity release plan that enables you to take cash from your home in chunks, as and when you need it. Interest is only charged on the cash which you have drawn down, meaning this can be a cost-effective way of borrowing.

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Interest only
lifetime mortgage

An interest only lifetime mortgage is a relatively new kind of equity release plan where you can pay the interest due on a monthly basis. This means the size of your loan never goes up, making them an increasingly popular option for over-55s.

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Frequently asked questions about enhanced lifetime mortgages

Which lenders offer enhanced terms?

Equity release companies specialising in enhanced lifetime mortgage plans include Aviva, more2Life and Just. They also offer standard lifetime mortgages, but have plans with enhanced terms (only available to those who qualify) offering higher maximum loan-to-values.

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What is the average interest rate?

Each lender sets their own rates which vary by plan and depend on how much you want to borrow compared to the value of your home (your loan-to-value). Many plans in the market have an interest rate below 4% but to get your personalised rate you need to speak to an adviser.

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Do I qualify for enhanced terms?

Your adviser will take you through a simple and straightforward questionnaire to assess if you are eligible for an enhanced lifetime mortgage. Lenders do not usually require you to have a medical in order to qualify, but may write to your doctor for a medical report in some circumstances.

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Is an enhanced lifetime mortgage the right choice for you?

An enhanced lifetime mortgage might seem like a good option if you want some extra money and don’t want to move house. However, there are some important ‘Things to think about‘. You need to look at how it will affect your future choices and financial situation in later life too.

Our friendly advisers can help you to explore enhanced lifetime mortgages – and the alternatives – without it costing you a penny. Only if you decide to go ahead we charge an advice fee of £1,695, payable on completion, and this can be added to your loan.

Your adviser will be able to explain how:

  • A lifetime mortgage is a loan secured against your home. It will reduce the value of your estate and may affect your entitlement to means-tested benefits now or in the future.
  • If you want to pay off the loan early repayment charges (ERCs) can be substantial.

 

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