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Benefits and risks of lifetime mortgages

A lifetime mortgage enables you to release money tied up in your home by providing a loan secured against your property.

Lifetime mortgages are by far the most popular type of equity release plan available. You need to be 60 and over, and to own your home, which must be worth more than £70,000.

The amount you receive will depend on your age and your property’s value.

Enhanced lifetime mortgages are a type of lifetime mortgage, that take into account medical and lifestyle factors to potenitally allow you to borrow higher amounts, should you qualify.

The below benefits and risks apply to all types of lifetime mortgage.

Benefits Risks
You retain ownership of your home and can still benefit from any house price increases

You will reduce the value of your estate  

You can choose to take the money you release as either a lump sum, as regular payments or on an ad hoc basis when you need it
While many providers offer a no negative equity guarantee that means you will never owe more than your property’s value, and therefore you will never leave a debt to your estate, it can mean that there is nothing left as an inheritance when you die
There are normally no repayments to be made as the interest 'rolls up' and the loan is repaid when you die or move into long term care
A lifetime mortgage is a lifelong commitment - if you choose to repay the loan early, significant early repayment charges may apply
Most offer fixed rates of interest, irrespective of what happens to rates

Charges for valuation fees and solicitors fees may apply, as well as admin fees

Interest is only charged from the day you take the funds Taking out a lifetime mortgage could affect the amount of means tested benefits you receive
Most plans feature a 'no negative equity' guarantee which means you will never owe more than the value of your home, so you will never leave a debt to your estate  
You can take as little as £10,000 initially and could have access to further smaller amounts as and when required  

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

Useful links Our equity release calculator    
Our advice service  
Films about equity release 
No negative equity guarantee

Equity release calculator

How much equity could you release from your home?

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