Lifetime Mortgage Broker
What is a lifetime mortgage?
A lifetime mortgage is a type of equity release product that allows homeowners to borrow money secured against their property without having to move out. You retain ownership of your home, and the loan, along with any accrued interest, is usually repaid when you pass away or move into long-term care.
We’re here to explain your options and help you find the best deal
How does a lifetime mortgage work?
When you take out a lifetime mortgage, your home is used as security for a loan. You can receive a tax-free lump sum, regular withdrawals, or a combination of both. You continue to live in your home while interest builds over time. Unless you choose to make repayments, the interest is added to the total loan amount and is usually repaid when the property is sold after you pass away or enter long-term care.
Who is eligible for a lifetime mortgage?
Qualifying for a lifetime mortgage in the UK depends on several factors such as age, property value and property type. Typically, you need to be at least 55 years old and own a home in the UK and live in your home permanently. Lenders usually require the property to meet a minimum value, often around £70,000.
What are the types of lifetime mortgages?
There are many typs of lifetime mortgages, each with their own pros and cons, according to your needs. This includes a lump sum lifetime mortgage, drawdown lifetime mortgage, interest-only lifetime mortgage, enhanced lifetime mortgage, flexible lifetime mortgage and inheritance protection lifetime mortgage.
We would be happy to help you explore the type most suited to you!
What are the benefits of lifetime mortgages?
Before considering a lifetime mortgage, it is important to understand the advantages it can offer.
- You still own your own home as you will remain the sole proprietors until you pass away or go into permanent care. So, you’ll have peace of mind you ‘re never going to be forced to move out.
- You can receive a tax-free lump sum and regular withdrawals, which can be used for home improvements, supplementing retirement income, paying off debts, or helping family members financially.
- You benefit from the no negative equity guarantee, as the Equity Release Council ensure you will never owe more than your home is worth when it’s sold.
- You get flexibility as some plans allow you to withdraw funds gradually or make voluntary repayments to reduce interest
- You can still move into a new house if circumstances change – as long as it meets your provider’s lending criteria.
- You can still leave an inheritance as your loan plus interest will be paid off in full upon selling your house.
How can a lifetime mortgage broker help me?
A lifetime mortgage broker compares products from multiple lenders and recommends the most suitable solution for you and your circumstances. They explain all fees, interest rates, risks, and benefits, and carefully guide you through the application process to ensure you make the best decision.
What is equity release?
Equity release is a way to unlock some of your home‘s worth and transform it into a tax-free, cash lump-sum. It is simply a long-term loan that can be reimbursed through your home until you pass away or need long-term care. You’ll stay a homeowner with no need to move out until then.
What is the “no negative equity guarantee”?
Most lifetime mortgages offered by lenders who are members of the Equity Release Council include a no negative equity guarantee. This ensures that you will never owe more than your home is worth when it is sold, providing protection for your estate and beneficiaries.
We’re here to explain your options and help you find the best deal
Lifetime mortgage FAQs
How much can I borrow with a lifetime mortgage?
The amount you can release depends primarily on your age, the value of your home, and the type of property. Older borrowers can usually release a higher proportion of their property’s value. Lenders set limits for each plan, and your lifetime mortgage broker can provide an estimate based on your circumstances.
What are the costs involved?
Lifetime mortgages may involve adviser fees, legal fees, valuation fees, and arrangement charges. Some lenders also charge early repayment fees if the plan is settled before a certain date. Your broker will explain all costs and ensure there are no hidden charges before you proceed.
Do I have to make monthly mortgage repayments?
Most lifetime mortgages do not require monthly repayments. If you choose not to make payments, the interest accumulates over time, increasing the total amount owed. Some plans allow optional repayments to reduce interest growth, but this is not required.
How long does arranging a lifetime mortgage take?
On average, arranging a lifetime mortgage takes four to six weeks from initial advice to completion, though complex cases may take longer. Your mortgage broker will guide you through each stage and keep you informed of any delays.
Will I receive my money all at once?
You may either obtain all the money in one payment or take smaller amounts in stages. These smaller payments can be made as and when you choose to take them, so, if you are paying the deposit for the first home of a loved one or helping with tuition fees, you can receive those amounts as and when you need them.
Will a lifetime mortgage affect my benefits?
A lifetime mortgage can affect means-tested benefits in the UK, such as Pension Credit or support from your local council. It is important to speak to a qualified adviser about your personal circumstances before taking out a plan, so you fully understand how it could impact any benefits you receive.
What are the risks of a lifetime mortgage?
Lifetime mortgages do come with several risks. The loan and interest accumulated over time reduces the value of your estate for inheritance. They may affect means-tested benefits, and early repayment fees may apply if you settle the plan early. It is important to fully understand these risks before proceeding.
What is the difference between a lifetime mortgage and a residential mortgage?
A residential mortgage is a standard loan used to buy or remortgage a property, whereas a lifetime mortgage allows you to borrow against your home without monthly repayments. There are also differences relating to the term of your loan, monthly repayments, how interest is charged, affordability checks and interest rates. It’s best to discuss these differences, and we’d be pleased to help you understand them fully.
