Can I arrange a lifetime mortgage to buy a house?

How equity release can assist with home purchases

Written in line with our editorial policy.

Do you dream of moving to a more expensive home or purchasing a second property, perhaps a holiday home or a buy-to-let? Then equity release could give you the access to the extra money that you need.

To explain how homeowners can arrange a lifetime mortgage to buy a house, we’ve put together the following information:

• How does an equity release plan work?
• Can I use the equity in my house as a deposit on another property?
• Equity release to buy a holiday home.
• Equity release to purchase a buy-to-let.
• Can I use a lifetime mortgage to buy a house?
• Speak to an equity release specialist.

We hope this article will help you understand everything you want to know about arranging a lifetime mortgage to buy a house. For further information and advice, please don’t hesitate to contact our friendly selected equity release advisers.

Simply call us on 0808 178 3055 or request a call back and we’ll arrange a no-obligation appointment with an adviser for you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

How does an equity release plan work?

Before we get into using equity release to buy a house, let’s take a moment to summarise how a plan works. 

Equity release allows homeowners aged 55+ to release some of their home’s value without having to sell or move house. A lifetime mortgage is the most popular type of equity release plan today and is available as a lump sum or drawdown plan.

One of the biggest benefits of equity release is that there are no mandatory monthly repayments to make on the loan. This is because the loan plus interest is paid off when the homeowner/s pass away or move into long-term care. 

Customers can make voluntary payments up to a certain amount each year to reduce the interest accruing, but there is no obligation to do this. 

Not yet 55? There may be other ways to release equity if you are under 55. 

Can I use the equity in my house as a deposit on another property?

Yes, homeowners aged 55+ can use equity release to provide a deposit for another property. There are many popular reasons for arranging an equity release plan, including raising the funds needed to buy a house. 

You might want to arrange a plan so that you can:

• Buy a second house, such as a holiday home
• Purchase a buy-to-let or investment property
• Buy a more expensive main residence than the one you currently own

If you are 55+ and thinking about using equity release to buy a house then please do call us for more information. Our selected advisers are expertly placed to search for the best deal for you and guide you through the process. Call us on 0808 178 3055 or request a call back today to arrange an appointment.

Equity release to buy a holiday home.

If you fancy owning a second property such as buying a holiday home to enjoy UK staycations in, but don’t have a cash facility large enough, then you could apply for an equity release plan. This may enable you to raise the funds you need from your main residence to put a deposit down on another, or even buy it outright.

Unless you choose to make voluntary payments to service the interest, there are no monthly repayments to make with a lifetime mortgage. Instead, the loan plus interest is rolled-up on a compound basis and only repaid once that property is sold, usually when you pass away or move into long-term care.

Equity release to purchase a buy-to-let.

If you are looking to purchase a buy-to-let house then some providers do allow you to arrange a lifetime mortgage to buy a rental property.  

Perhaps you’ve seen a great deal on a house that you want to improve and then let out? Or maybe you want to buy a holiday home but intend to let it out for a few months a year when it will be empty? If a cash shortfall is the only thing stopping you, then you could apply for an equity release plan. 

By doing so, you could potentially unlock the money you need from your own home to cover the necessary deposit, or even buy the second property outright.

Can I use a lifetime mortgage to buy a house?

If you want to move house to a larger or more expensive property than your own, it can be challenging to find extra cash when you are in or approaching retirement. The good news is that equity release could help. 

The basic principle of this option involves arranging a lifetime mortgage to unlock money from a house you don’t yet own, in order to buy it.

This could be a good option for you if you’ve already got most of the cash needed to purchase the property but have a shortfall. To ensure everything runs smoothly, your equity release solicitor and conveyancing solicitor would work closely to ensure the release of funds from your new home coincides with your purchase.

Do remember though, you can’t have a regular residential mortgage together with a lifetime mortgage on the same property.

If you are looking at properties and wondering “can I use a lifetime mortgage to buy a house?” then speak to our friendly selected advisers today on 0808 178 3055, or request a call back here. 

Speak to an equity release specialist.

The best way to search for the right plan for your individual needs is by speaking to a fully qualified equity release specialist. This ensures you can compare plan features and providers and fully understand which type of plan will work best. 

If you are looking for a lifetime mortgage to buy a house, our friendly selected advisers are here to:

• Check your eligibility and if a plan would be the best financial option for you.
• Search for the most competitive equity release quotations.
• Explain all the pros and cons of each type of plan you are considering.
• Help you decide which plan best suits your unique wants and needs.
• Answer all your questions, such as “Can I use the equity in my house as a deposit on another property?” or any others you might have.
• Expertly guide you through the process.

Our selected equity release specialists are ready and waiting to help you explore your equity options and find the best plan for your needs. Please call 0808 178 3055, or request a call back for a time that suits you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn