Lifetime mortgage

A lifetime mortgage enables you to release tax-free cash from your home whilst continuing to live there. It is a loan secured on your home, which does not need to be repaid until you pass away or go into long-term care.

What is a lifetime mortgage?

You borrow money secured against your home and will be charged interest on the money borrowed. Usually when people are talking about a lifetime mortgage they are referring to a lump sum plan with roll-up interest (sometimes called a roll-up lifetime mortgage). You 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 effectively grows (compounds) over time.

Lifetime mortgages have increased in popularity over recent years thanks to their modern features and competitive interest rates, with many plans now below 3%. The rate you get will depend on your individual circumstances.

The eligibility criteria is the same as any equity release plan. See how much you could borrow with a lifetime mortgage.

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Features of a lifetime mortgage

Lifetime mortgages are by far the most popular type of equity release plan. Here are some of the reasons why:

  • Spend the money however you like – popular uses include repaying debts or an interest-only mortgage, making home improvements and helping loved ones.
  • Get a fixed low rate for life – interest rates have dropped in recent years with many plans now below 3%. This is 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 – whatever happens to the value of your home you can never owe more than the price it’s sold for, meaning no debt can be passed on.
  • Repayments your way – there are typically no monthly repayments to make, but with some plans you can make payments to reduce interest.
  • Live in your home for life – you have the right to live in your home (rent free) for life: until you pass away or move into long-term care.

Getting started with a lifetime mortgage

Get a quick quote

Use our free lifetime mortgage calculator to find out in minutes if you qualify and how much you could release.

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Speak to an adviser

Book a free adviser fact find call to find out from one of our experienced advisers if a lifetime mortgage is right for you.

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Download our guide

Packed full of information, our guide is the perfect starting place for anyone considering taking out a lifetime mortgage.

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Types of lifetime mortgages

A roll-up lifetime mortgage isn’t your only option. Here’s two other types of lifetime mortgages that your adviser will consider for you depending on your individual circumstances:

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.

Explore drawdown lifetime mortgages

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.

Explore interest only lifetime mortgages

Frequently asked questions about lifetime mortgages

Can I pay off a lifetime mortgage?

Lifetime mortgages aren’t designed to be repaid in your lifetime and doing so may incur early repayment charges (ERCs). However, many plans now come with fixed ERCs which decrease the longer you have the plan. If you may want to pay it off early because you are looking to sell your property in the future or are expecting an inheritance then your adviser will find you the plan which can accommodate this in the most cost-effective way.

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What is the average interest rate?

Lifetime mortgage interest rates fluctuate constantly, with changes happening almost daily. To get your personalised rate you need to speak to an adviser. 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). When thinking about a drawdown lifetime mortgage it’s important to consider features as well as rate, which our advisers will always do.

Get personalised rate

Do I qualify for a lifetime mortgage?

To qualify for a lifetime mortgage you must be over 55 and a UK homeowner with a property worth at least £70,000. If you are in a couple then you must both be over 55 and live in the property to be eligible. Any outstanding existing mortgage balance could also effect your eligibility, as you need to be able to release enough money to pay this off. Plus your home must be ‘mortgageable’ in the eyes of the lender (like with a traditional mortgage).

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Is a lifetime mortgage the right option for you?

A 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 lifetime mortgages – and the alternatives – without it costing you a penny. Only if you decide to go ahead we charge an advice fee of £995, payable on completion.

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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Don’t just take our word for it

Can I say a huge thank you for all your time and patience in explaining and ensuring that I have the best contract for my needs. It was clear that your guidance was not money driven but a concern for my future welfare and again I thank you. I would have no hesitation in recommending your services to anyone in the future.

Mrs C Trigg, Nottinghamshire

From the outset our adviser encouraged us to explore our scepticism thoroughly and this inspired confidence. He listened patiently and carefully assessed our rather complicated set of requirements. He acted in a totally professional yet friendly way, continuously ensuring that we had understood the options and the implications of any decisions to be made. He encouraged us to move at our own pace, retracing steps – sometimes several times – ensuring that equity release was right for us.

Mr and Mrs JD, Berkshire

My husband and I were very happy with the advice our adviser gave to us re equity release. There were several questions I had in relation to releasing some money but had not thought them through. Our adviser explained everything very clearly and I didn’t feel the push to go ahead some firms give. I felt that either way the decision was ours to proceed or not.

Mrs Colley, Wales

Our adviser James was extremely helpful and went through all options with us. He listened to what we wanted and explained everything and took his time.

What really impressed me with James was that instead of thinking of himself he was genuinely trying to find the best option for us, which in today’s world does not happen. I would certainly recommend James to anyone as he is honest, reliable and makes you feel at ease.

Mrs D Pepper, Lancashire

Your lifetime mortgage safeguards

As proud members of the Equity Release Council, all of the plans we recommend meet their standards, so that you:

  • Have the right to remain in your home for as long as you want, or until you move into full time residential care
  • Have the freedom to move to another property without financial penalty (subject to criteria)
  • Will never have to repay more than the value of your home with the no negative equity guarantee