Equity release – lifetime mortgage
A lifetime mortgage is a form of equity release, allowing you to access the money tied up in your property without having to move out. It provides you with a lump sum of money once the plan completes.
Advantages
- Available to homeowners aged 55 and over.
- The cash you release is tax-free and is yours to enjoy.
- The ‘no-negative-equity’ guarantee means that your estate will never owe more than your property is worth when it is sold.
- There is no requirement to make monthly repayments with a drawdown lifetime mortgage. But you have the option of making voluntary repayments, subject to certain limits, if you would like to reduce the size of your loan over time. Early repayment charges may apply above a set value.
- You continue to own your home, and can benefit from any future house prices increase.
Disadvantages
- Equity Release will reduce the value of your estate and impact funding long-term care.
- If you don’t make repayments to cover the interest it will be added to the loan. This means the size of your loan will increase over time and you will be charged interest.
- If you want to borrow more money in the future you can apply for a further advance, however, there would not be a guarantee that further funds would be available.
- Your tax position and eligibility for means-tested benefits may be affected now and in the future.
- If you wish to pay off the equity release plan early, you may have to pay an early repayment charge. These differ from plan to plan.
I’d like flexible access to my money
If you’re looking for flexible access to your money, a drawdown lifetime mortgage may be a suitable solution for you, as you could release smaller amounts over time.
How much tax-free cash can you unlock from your home?
Use our free calculator to get a view of how much tax-free cash you could release to help you live your life, your way.
By supplying your email address, you are confirming that you are happy for us to contact you via email regarding products and services relevant to your enquiry.
A few things to think about
Equity release may involve a home reversion plan or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care. You can read more about the different types of equity release plans here and if you want more detail we can provide you with a personalised illustration to explain exactly what equity release could mean for you and will outline the features and risks.
You must take financial advice before proceeding with equity release or with any type of mortgage and there may be other options which better suit your circumstances.
You will need to pay off any existing mortgage or secured loan that you have. You can use some of the money raised through equity release to do this.
Another consideration is that equity release interest is compounded, so you pay interest on interest. The money you release, plus the accrued interest is then repaid when you die or move into long-term care.
Equity release may have an impact on your entitlement to means-tested benefits now and in the future.
Whether you proceed with equity release or another type of mortgage, initial advice is free and without obligation. Only if your case completes would our advice fee of £1,995 be payable. Other lender and solicitor fees may apply.
Other mortgages
Think carefully before securing debts against your property. your property may be repossessed if you do not keep up repayments on your mortgage and any debt secured on it.
Age restrictions may apply, depending upon the lender chosen
“We had a comprehensive review with realistic assessments and action plan supported by unrushed and uncomplicated discussions and suggestions. All very straight forward and customer focussed. ”
Ms Teale
What can the money I release from my home be used for?
The money that you release from your home can be used for lots of different things. You may want to:
- Pay off your current mortgage, reducing your committed monthly costs.
- Get the house shipshape, maybe it’s time for that new kitchen or bathroom.
- Go on your dream holiday, or plan a few smaller getaways.
- Provide a gift to a child or loved one, perhaps to help them onto the property ladder.
Life gets better with Age: We’re proud to support our customers
In 2024, we helped over 490,000 people explore their later life lending options.
Multi award winning advice
You're talking to the people who know.
We have been providing advice to our customers for over 20 years and will talk you through all your options and explain the pros and cons of each so that you're fully informed.
Our service is about finding out whether any of the solutions we offer are a good fit for you, and only then will we find the best plan for your individual needs.
Our promise to you...
- You will be assigned a dedicated advisor who will guide you through the process from start to finish.
- We will only recommend a solution if it's suitable for you.
- We will search a range of plans from multiple lenders to find the best solution for you.
- If we recommend equity release, the plans meet the standards of the Equity Release Council.
- You will receive a bespoke recommendation document to read at your leisure.
