What is a lifetime mortgage?

A lifetime mortgage is a form of equity release. It is essentially a long-term loan secured against a homeowners’ property — a way of unlocking tax-free cash from the value of it, without needing to move.

Is a lifetime mortgage right for you?

There are many different types of flexible lifetime mortgage schemes, from a variety of lifetime mortgage providers that can be tailored to your individual circumstances and needs, such as, an interest only lifetime mortgage, drawdown and roll-up options. We strongly advise chatting through what your plans are with one of our experienced and impartial lifetime mortgage advisors. They can discuss, for free and with no obligation, the whole market. We are authorised and regulated by the Financial Conduct Authority (FCA). We are also members of the Equity Release Council (ERC), the industry body for equity release mortgages. Our expert lifetime mortgage advisers hold equity release qualifications, so we can guide you through and give you a personal illustration to help you decide whether a lifetime mortgage is right for you.

How does a Lifetime Mortgage work?

A Lifetime Mortgage is a long-term loan secured against a homeowner’s property and it works as a form of equity release – whereby you can use the equity in your home to fund your retirement needs now. The interest is charged on the amount borrowed, which can be paid monthly or added on to the total loan amount. Both the loan and the interest are repaid in full, usually from the sale of your property when you die or go into long-term care. The money from the sale is used to pay off the loan.

Find out more about our Retirement Mortgages, Equity Release, Other Services and FAQs

Benefits and drawbacks of a lifetime mortgages?

The main benefit of a lifetime mortgage is, it’s a good way to raise a lump sum of tax-free cash or ongoing finance to top up your retirement income. It could also be a well needed replacement for a mortgage that you no longer have sufficient funds to repay – avoiding having to move home or release ownership before you are ready. The obvious drawback is, whether you pay it monthly or as part of the property sale, you are charged interest on the loan. It does not however need to be an increasing debt throughout retirement as many interest-only lifetime mortgage plans allow you to overpay an amount without penalty each year, plus the rates of lifetime mortgage interest available now are very competitive and carry strict guidelines to ensure you and your home are protected.

FAQs on Lifetime Mortgages and Equity Release >

What is the difference between a lifetime mortgage and equity release?

There are no differences as a lifetime mortgage is a type of equity release where borrowers can opt for a plan where the interest is added onto the total loan amount, with no interest payments monthly. When the home is sold the money from the sale is used to pay off the loan.

What is a drawdown lifetime mortgage?

A Drawdown Lifetime Mortgage is, again, a loan secured against your property that works as a form of equity release, but it allows you an agreed facility of funding to drawdown as and when you like, sometimes acting as a form of income. The amount that you can drawdown depends on the lender’s criteria, the value of your property and your age.

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