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Plans > Lifetime Mortgage
Find out how a lifetime mortgage could bring you tax-free cash to boost your income if you are over 55
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A lifetime mortgage is an increasingly popular way to turn equity locked in your property into cash. If you are aged 55 or over and have equity in your home, you could release tax-free cash without having to move – or use the loan to help purchase a new property.
This form of lending is a secured loan that’s typically repaid only when you pass away or move into long-term care. You retain full ownership of your property in the meantime and may have the option of protecting a percentage of its value to pass to your loved ones.
Here at Equity Release Wise, we bring you access to the best quotes and deals through one of the UK’s largest and best-established equity release specialists. Find out what’s possible for you: check here or talk to one of our friendly consultants by calling 0808 178 3055 or request a call back.
Each year over 70,000 UK equity release plans are agreed, according to the Equity Release Council, with the majority being lifetime mortgages. Homeowners use the tax-free cash they release for everything from home improvements and holidays to helping their children get on the property ladder.
A lifetime mortgage could be ideal if you need money but don’t have enough regular income to make loan repayments. It releases tax-free cash through a loan secured against the value of your home. The loan is repaid by selling the property when you pass away or move into long-term care.
When your plan comes to an end, any money left over after paying off the loan and interest will go to your beneficiaries. You may be able to ring-fence some of the value of your property to ensure there is an inheritance for your family. Alternatively, your family may be able to keep the property by using some of your estate to pay off the loan.
Read more: How does equity release work?
With many lenders and hundreds of plans to choose from, you can choose either a lump sum plan where you release a one-off payment, or a drawdown plan where you access the loan in instalments. If you are living with certain medical or lifestyle factors, you may be eligible for enhanced equity release that lets you release more cash or benefit from lower interest rates.
Like most lending, interest is charged on the amount you borrow. Typically, you make no monthly payments and the interest is added to the loan amount each month on a compound basis. However, you may be eligible for an interest-only lifetime mortgage that lets you make payments to prevent the interest from building up.
Lifetime mortgage loans are usually secured against your main residence, although some lenders offer equity release on second homes or buy-to-let properties.
All the providers we deal with support the Equity Release Council’s no-negative equity guarantee. This protects your beneficiaries from paying any money if the value of your property doesn’t cover the full amount of the loan and interest.
Read more about your options through the links below, or call 0808 178 3055 to talk about your situation with one of our selected advisers so that you can get the best solution for you.
Lump sum
Access a tax-free cash lump sum if you’re a homeowner aged 55 or over. You retain full ownership and can stay at home until you pass away or move into long-term care.
Drawdown
Instead of making a one-off cash withdrawal, you take an initial cash sum and additional funds as and when you need them. This helps to reduce the total interest you pay.
Interest-only
A more cost-effective method of equity release where you make voluntary interest payments to reduce or prevent compound interest building up.
Enhanced lifetime mortgage
Certain health conditions or lifestyle factors could qualify you for higher cash releases or lower interest rates. A simple questionnaire is all that’s needed to check eligibility.
Second home lifetime mortgage
If you have a second home you may be able to secure a lifetime mortgage against it, or make your dream of a second home come true with a release from your main residence.
Buy-to-let lifetime mortgage
These specialist plans could enable you to release equity from a buy-to-let property, or to use the wealth in your home to help you make a buy-to-let investment.
Another, much less common form of equity release may be a more suitable alternative to a lifetime mortgage. A home reversion plan is a type of equity release where you sell all or part of your property at less than market value in return for a lump sum, a regular income, or both. You stay in your home as a tenant, paying no rent, until you pass away or move into long-term care.
How much money you can release depends on several factors. These include the age of the youngest homeowner (must be 55 or over), the value of your property, how much equity you have in the property, and where you live.
The older you are, the more you can borrow, with levels typically ranging from 25% to 60% of the property’s value. Lenders will also have a minimum loan amount, starting from £10,000. The average release amount for new customers choosing a drawdown lifetime mortgage was £124,7351 in 2021, according to the Equity Release Council’s market statistics.
To find out how much you could borrow, use our free equity release calculator or talk to one of our friendly consultants by calling 0808 178 3055 or request a call back.
Read more: How much equity can I release?
Each lender has their own criteria for a lifetime mortgage, but the following are examples of typical criteria:
Call us on 0808 178 3055 and we’ll arrange a free, no-obligation appointment and lifetime mortgage advice* from a specialist who will confirm whether you are eligible. If you’re unable to talk now, request a call back and we’ll call when it’s convenient to you.
Now could be a good time to switch to a different lifetime mortgage. You may be able to release more tax-free cash due to being older than when you took out your existing plan. An increase in your property’s value or being in poorer health could also qualify you for further cash. Interest rate changes may also save thousands over the lifetime of your plan.
Why not arrange a free review* to find out if switching works for you?
A lifetime mortgage is a specialised form of lending, and not every lender offers it. Even so, there are plenty of providers to choose from and it could be time consuming and daunting for you to contact them all individually. This is where Equity Release Wise comes in: we can arrange a search across top equity release providers to help you find the best lifetime mortgage for your unique circumstances.
Here are just some of the leading providers the search will cover. All of them are of course authorised and regulated by the Financial Conduct Authority and are members of the Equity Release Council.
Find out if you qualify for equity release and how much you could borrow. Just click ‘Get started’ or call us on 0808 178 3055 and one of our team will be delighted to help arrange a free consultation and quote*.
1. Start your quote journey
Simply click ‘Get started’ to begin your search for the best plan for your circumstances.
2. Tell us what you need
Fill out some simple details about your situation so we can start to prepare your quote.
3. Compare your best deals
You’ll get personalised quotes tailored to your unique circumstances and goals.
Still unsure of a few things? We’ve got you covered with answers to some of our most frequently asked questions.
There are two main types of equity release, and a lifetime mortgage is one of them. This is where you take out a loan secured against your property, keep ownership of it and still have the right to live there. It’s far and away the most popular form of equity release. The second type is known as home reversion, where you sell your property or a percentage of it. Here too, you still have the right to live there, but this will be as a rent-free tenant rather than as owner of the property.
With a regular lifetime mortgage, you have zero monthly repayments and any interest that builds up is paid along with the loan itself once the property is sold when you pass away or move into long-term care. An alternative is an interest-only lifetime mortgage where you make voluntary payments of some or all of the interest to reduce or prevent the interest building up. Some lifetime mortgage plans also allow you to pay off some of the borrowed capital.
Just as with a normal residential mortgage, you should be aware of costs involved in setting up an equity release lifetime mortgage. Your adviser will make sure you understand these in full before you decide whether to take out a plan, but below is a summary.
Your lender will typically charge valuation, arrangement and completion fees, with further fees payable to the solicitor who acts for you. Some of these fees can be paid from the money you borrow, so you may not have to worry about finding them from your existing savings.
Our selected advisers naturally charge an advice fee – but remember that any initial advice or information you receive from them is completely free and without obligation. You only pay them a fee if you apply AND your case completes.
Once a plan is taken out, there aren’t normally any fees. One exception is an early repayment charge that some lenders request if some or all of your lifetime mortgage is paid off before you pass away or move into long-term care.
Even though interest rates on loans and regular mortgages may be rising, the opposite has been true for equity release rates recently. This is Money reported that plans ‘can now be found with rates as low as 3% in some cases’ – significantly lower than has previously been possible.
Most lifetime mortgages will be arranged on a fixed interest rate, so your plan won’t be affected by rising interest rates. Variable rate plans are also available that track interest rates, so the rate you pay may rise.
Yes, lifetime mortgages and other forms of equity release are available across every country in the UK. When you contact Equity Release Wise, we will connect you with our carefully selected advisers who can help you find the best plan for your circumstances.
A lifetime mortgage has worked for thousands of over 55s in need of tax-free cash. But it’s important to understand lifetime mortgage pros and cons before deciding if it’s right for you, so here are some potential risks you need to be aware of:
We hope this information has been useful. To find out more or arrange a consultation with an adviser, please call or request a call back and we’ll be happy to help further.
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Request a call back+ Client testimonials refer to the service provided by our selected equity release advisers. We have changed the clients’ names and certain identifying information to protect their privacy.
Please note that equity release will involve a home reversion or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care. To fully understand the features and risks, ask for a personalised illustration. Equity release requires paying off any existing mortgage. Any money released, plus accrued interest would be repaid upon death, or moving into long term care.
