Lifetime Mortgages

Lifetime Mortgages enable you to release a tax-free lump sum from your home, secured against the value of your property. This can be taken as a lump sum, or in smaller amounts as needed.

With a Lifetime Mortgage, you have the option to pay any capital or interest repayments (subject to terms and conditions) before the property is sold. We would encourage this, where possible.

You can use the released money in many ways; for example: to make home improvements, plan for your retirement, or enable you to give financial assistance to a family member.

Lifetime Mortgages

Lifetime Mortgages enable you to release a tax-free lump sum from your home, secured against the value of your property. This can be taken as a lump sum, or in smaller amounts as needed.

With a Lifetime Mortgage, you have the option to pay any capital or interest repayments (subject to terms and conditions) before the property is sold. We would encourage this, where possible.

You can use the released money in many ways; for example: to make home improvements, plan for your retirement, or enable you to give financial assistance to a family member.

Book an initial,
no-obligation consultation

We operate to the highest standards and will always explore other financial options available first before proceeding with an equity release plan. We will only arrange a mortgage if we are completely happy that it meets your best interests. If it’s not suitable for you, we will say so.

How does a lifetime mortgage work?

The interest charged on a Lifetime Mortgage is ‘rolled-up’, if payments are not being made, and is then added to the loan. This means that, whilst you don’t have to make any regular payments, the amount you borrow, including the rolled-up interest, is repaid when your home is sold. This usually happens once the last borrower dies or moves into long-term care, or you move home.

Lifetime Mortgage interest rates are dependent on factors including your age and the value of your property.

Some Lifetime Mortgage providers allow you to take the capital in stages, which is called ‘drawdown’. The main benefit of a drawdown facility is that the interest only becomes payable when you take the capital, therefore the overall debt builds at a slower pace.

Although there is no guarantee that property values will rise in the future, any increase in property value could offset the rolled-up interest on the loan.

When is a Lifetime Mortgage repaid?

The eventual sale of your property is used to pay off the loan, with any remainder being left to your beneficiaries.

It is often possible to ring-fence some of your property’s value as inheritance for your family.

For mortgages approved by the Equity Release Council, you have protection under the ‘No Negative Equity Guarantee’. This means that your estate won’t have to repay more than what your home sells for, even if you owe more, as long as your home is sold for the best price reasonably available at the time.

Is a Lifetime Mortgage right for you?

To be eligible for equity release through a Lifetime Mortgage:

You (and your partner, where relevant) must be aged 55 or over.

You must own (or be buying) your own home.

Lifetime Mortgage pros and cons

Pros

You could have a lump sum to spend as you wish, without the need to make any repayments until your property is sold.
You still own your house, so will benefit from any increase in value.
You can still move home if you wish.
You can ringfence a percentage of the value of your home for your beneficiaries.
It may be possible to draw higher amounts if you are in ill health.
You could be protected by the No Negative Equity Guarantee.
Some providers offer interest-only mortgages, requiring a fixed monthly interest payment. This arrangement means that the overall debt does not increase over time.
We encourage family involvement at all stages of the process.

Cons

The loan debt accumulates (if payments are not being made). The younger you are when you take out the loan, the higher the potential debt when the scheme ends due to greater life expectancy.
The value of your estate is reduced, leaving less for your beneficiaries.
Interest rates may be high due to the long-term nature of the loan.
Further loans may not be possible.
There may be early redemption costs.
When you take out the loan, it isn’t possible to know how much the final cost of the mortgage will be.
Equity release may affect your eligibility for means-tested state benefits.

What our clients say

“We consulted 55Plus when we were thinking of taking out an equity release mortgage to ease our finances in retirement. We were so impressed by how they looked after us.

My husband and I are both of retiring age, and we wanted to have a little bit of money in store to make our retirement a bit easier, and – after reading a lot about it – we thought that an equity release mortgage would be the best way of doing it. We were recommended 55Plus, and we’re so glad we used them!

Having the equity release mortgage in place is a tremendous relief. We’ve had quite a good life and have spent our money as we went along. By the time we got to this stage, I didn’t want to sit around not putting on the lights because we can’t afford it. I can’t praise 55Plus highly enough and am happy to recommend them to anyone thinking about their finances at this stage of life.”

LS

Gravesend, Kent

Your questions answered

Can I make payments to reduce the debt, as with a standard mortgage?

Yes. Lenders will allow you to make interest payments, as you can with a standard mortgage.

If you pay all the interest, your total debt will remain the same, rather than accumulate. It also doesn’t have to be you who makes the payments; family members can make payments, to help manage their future inheritance.

Most lenders will allow you to repay between 10% to 15% of the initial amount borrowed each year, including interest, with no early repayment charges.

Do I still own my house with a Lifetime Mortgage?

Yes, you will still own your house if you take up a Lifetime Mortgage. The loan is paid off with the proceeds from the sale of the house, after the last-named borrower on the mortgage dies or goes into long-term care.

Can I alter my home if I have a Lifetime Mortgage?

Most providers will be happy for you to make home improvements, such as an extension, conservatory, or new kitchen, but you may require their written consent beforehand.

A detailed description of your planned modifications may be required for your provider’s approval.

Can I move home if I have a Lifetime Mortgage?

Yes. All lenders who are Equity Release Council members will allow you to move home whenever you wish. You must inform your lender before you do so.

When you move, you may either repay the loan and interest in full, or alternatively you may be eligible to transfer the scheme to your new property if it meets your provider’s criteria at that time.

Could I lose my home?

As long as you adhere to the terms and conditions of the mortgage agreement, you will not lose your home.

What if I owe more than the value of my home?

The Equity Release Council (ERC) offers a No-Negative Equity Guarantee. This means that your estate won’t have to repay more than what your home sells for, even if you owe more, providing it has been sold for the best price reasonably obtainable.

Can I still claim benefits with a Lifetime Mortgage?

Means-tested benefits may be affected if you decide to take out a Lifetime Mortgage.

Are all Lifetime Mortgages approved by the Equity Release Council?

We endeavour to work with all providers who are approved by the Equity Release Council. Where this is not possible, we will advise you accordingly.