A lifetime mortgage is a loan secured against your
home. There are no regular repayments to make and
the loan and interest are rolled up and usually repaid
when you die or go into long-term care.
What are the benefits?
- You receive a cash lump sum to spend on whatever
n You still own your home and continue to live in it until
you die or go into long-term care
- A range of products in the market allow you to take a
cash lump sum at the outset and you may also be able
to release further amounts in the future
- A 'no negative equity' guarantee means neither you nor
your estate will have to pay back more than your home
is sold for, as long as this is for the best price possible.
What are the considerations?
You don't have to pay tax on the amount you release,
but it may affect your entitlement to tax and means
tested benefits. A specialist adviser will be able to review this
- If you choose to end the plan early you will have
to repay the loan and interest, and there may be
substantial early repayment charges
- As there are no monthly repayments, interest builds
up through the lifetime of the mortgage and is
charged on the total amount borrowed and the
interest already added. This will quickly increase the
amount you owe and reduce the value you have in
your property, and therefore reduce the amount of
inheritance you can leave.
This is a lifetime mortgage. To understand the features
and risks, ask for a personalised illustration.
Am I suitable for a lifetime mortgage?
You may be eligible for a lifetime mortgage if you can answer 'Yes' to each of these statements:
- I am/and my partner is a homeowner aged 55 or over.
- I have no mortgage, or only a small mortgage, remaining on my property.
- My property is in England, Scotland, Wales or Northern Ireland, and is
valued at a minimum £75,000.
- I want a fixed rate of interest applied to my loan throughout the term of
- Typically you would also need to to borrow at least £15,000.
You should not consider a lifetime mortgage plan if you answer 'Yes' to any of these statements:
- I have savings or other money that I could use first.
- I would prefer to sell all or part of my home, and stay living in it, rather than take out a loan.
- I would prefer to sell my property and downsize.
- I want to guarantee an inheritance from my property.
How is a lifetime mortgage paid off?
Unlike a standard mortgage, there is no set repayment term and there are no
monthly repayments to be made. Instead, the loan will be repaid when your home
is sold, usually following your death or your move into long-term care (or in
the case of joint borrowers, when the surviving partner dies or moves into
long-term care). When repayment is due, the full amount must be repaid. This
amount will be made up of the original loan amount plus any accrued interest. It
may also contain any charges that have been added to the loan. Any remaining
equity in your home, after the loan has been repaid, will belong to you or your
estate. Of course, if you have protected a proportion