Lifetime Mortgages

Our houses are more to us than just a place to live, they are our homes.

A lifeime mortgage allows you to unlock some tax-free funds from your home and retain ownership without having to leave your home.

Lifetime mortgages are the most poular form of equity release. If you’re a homeowner aged at least 55, you may be able to use this form of equity release to top up your finances in later life. And the best part is that you can use the tax-free funds you unlock how you'd like, from home improvements to clearing existing debt.

The funds you can access with a lifetime mortgage is a loan that will be secured against your home. You don’t have to sell your home, you won’t have to move, and there’s no monthly payments – unless you choose this option. Our expert panel of independent advisors can help you see if a lifetime mortgage is the right option for you.

How does it work?

By taking out a lifetime mortgage, homeowners can unlock cash against the equity in their home, which must be their main residence. You usually have two options with a lifetime mortgage too. You can either take the amount you release in a lump sum where interest is charged on the full release amount from day one, or you can choose a drawdown option, where you can take a smaller initial lump sum, then able to access further amounts as and when required from your drawdown cash facility.

You are using the value of your home as security for borrowing money. The loan (and any interest charged) is repaid out of the future sale of the property, usually when you pass away or go into long-term care (or if you are a couple, until the survivor passes away or goes into long-term care).

The main difference is that with a standard mortgage you make regular contractual payments in order to repay the mortgage in full over a set period of time, whereas with a lifetime mortgage you can release a large sum of money and are not required to make any monthly payments at all (unless you choose to). Instead, the interest is added to the loan and is repaid when you go into long-term care or pass away, which as the name suggests, is at the end of your lifetime.

Interest rates for lifetime mortgages

With a conventional repayment (capital plus interest) mortgage, interest is charged on an amount you owe. This amount then reduces over time until you've paid it back in full. however, the interest on a lifetime mortgage is charged on an amount that increases. This is because, with no monthly repayments, the interest continues to add to what you owe.

Some lifetime mortgage providers may offer variable-rate plans. Interest rates currently start from around 6% MER - fixed for life*. Contact us today for the current interest rates that might be avaliable to you.

* Rates correct as of October 2023. The actual rate that you receive will depend on your circumstances.

Is a lifetime mortgage right for you?

It’s important to understand that a lifetime mortgage won’t be the right option for everyone. You also can’t apply unless you seek advice from a qualified equity release expert – that’s a regulatory requirement.

Here at Equity Release Explained, we introduce you to a panel of advisors that specialise in providing you with comprehensive, impartial and customised advice. It’s all based on you and where you want your finances to be in later life – no matter the reason. The advisors we will introduce you to, are not tied to any lifetime mortgage providers. So, you can be sure that any advice you receive is completely based on your needs. It equity release is not the right option for you, they will tell you.

You might be eligible for a lifetime mortgage if you’re a UK homeowner and aged 55 and over with a property worth at least £70,000, which means you could be able to explore the possibility of releasing tax-free funds from the equity in your property.

Are you ready to take the first step towards finding out if you can unlock tax-free funds from your home? If so, call Equity Release Explained to arrange your initial consultation on 01492 818 526. You can also ask us to call you back if it’s more convenient.

The initial discussion is free and there’s no obligation. If you do decide to go ahead, the panel of advisors that we will introduce to you charge a fixed advice fee of £1,495, is only payable upon completion, and also offer a price match guarantee.