Compare Lifetime Mortgages

  • We've teamed with Fluent Lifetime to help in your search for a lifetime mortgage
  • Direct access to qualified Lifetime mortgage advisers
  • Lifetime mortgages are a form of Equity Release
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Information written by Holly Bennett Last updated on 06 January 2022.

What is a lifetime mortgage?

A lifetime mortgage is available to those over 55 & allows you to release some of the cash tied up in your home without having to move. You can take the loan as a lump sum or in smaller amounts, or both. The provider charges interest on the amount you borrow which is either fixed for the lifetime of the loan or capped if it’s a variable interest rate. The loan plus interest is usually paid off once your home is sold, so you don’t have to make monthly repayments, but you also may choose the option to pay some of the interest and loan capital during your lifetime, should you wish to reduce the impact on your estate.

You borrow against a portion of the value of your home, which must be your main residence. The loan amount can also depend on your age, medical history and lifestyle factors. If you have a particular health condition, for example, you may be offered an enhanced lifetime mortgage, where you can borrow more and get a lower rate of interest, based on life expectancy. You’ll need to sign a declaration, and the provider may check your medical information with your doctor.

You can carry on living in your home until you die or go into long-term care, and if you take out a joint equity release plan with your partner, one of you can stay even after the other passes away.

If you have any mortgage left to pay on the property, you'll usually need to use the lump sum to pay that first. Otherwise, it’s up to you how you use the money, which might be for:

  • Home improvements or adaptations.
  • Topping up retirement income.
  • A family holiday or a leisure activity.
  • Private health treatment or care bills.
  • A cash gift for family members.

What to consider when choosing a lifetime mortgage

When comparing providers’ lifetime mortgage plans, and thinking about how much you’d like to borrow, consider:

  • The amount of equity you need to release.
  • Whether you want to access it as a lump sum or as smaller amounts, or both.
  • The value of the property you’re securing the loan against.
  • Your age and the age of your partner, if it’s a joint application.
  • If your home is mortgage-free or there’s some left to pay.
  • If you want to ring-fence an amount to leave as an inheritance.
  • If the interest is fixed or variable.

If you think equity release might be right for you, you should consider all your options and talk to an equity release adviser. They can help you find the most cost-effective plan for you, or suggest alternative routes to getting the cash you need.

As well as the interest rate charged, you’ll have initial setup costs, including adviser fees, arrangement fees, legal fees and surveyor’s valuation fees. Our equity release calculator will help you work out how much equity you may be able to release, and show some of your lifetime mortgage options. This is just a guide, so for a personalised illustration, you can speak to an adviser.

Lifetime Mortgages FAQs

What is equity release?

Equity release is a way of unlocking cash tied up in your home, if you’re aged 55 or over, without having to move. You can keep on living in your home for the rest of your life, or until you move into long-term care – and you don’t have to make monthly repayments.

How does equity release work?

The most popular type of equity release is a lifetime mortgage. This is a loan based on the value of your home, which you can take as a lump sum or in smaller amounts in a drawdown facility, as and when you need them.

You don’t usually pay back the loan over time, like you would a traditional mortgage. The loan amount and interest is usually repaid in full when you die or move into a care home, and the house is sold. Though some plans let you repay some interest, or interest and capital.

What are the different types of equity release?

There are two main types of equity release: lifetime mortgages and home reversion plans. Our comparison service is meant to help people who are looking for a lifetime mortgage only.

How do lifetime mortgages work?

With this type of equity release, you take out a loan which is a percentage of the value of your property. You take the cash either in one tax-free lump sum, or in smaller payments, or both.

The lender charges interest on the loan, which usually rolls up and is added to the total loan value. This is called compound interest. So unlike a traditional repayment mortgage, interest is calculated on the loan and interest already added, so what you owe soon mounts up.

However, some plans let you make regular or occasional repayments to help cover the interest during the term of the loan, and some let you repay some of the capital. You may also be able to reserve some to leave to your beneficiaries.

The lender is repaid when you die or move into a care home, after the house is sold. Any remaining amount can be left to those you’ve named in your will. You keep full ownership of the property until then.

What is a home reversion plan?

This type of equity release isn’t a loan. Instead, you sell some or all of your property to the lender at a price below the market rate. Though it depends on your age, you’ll usually only get between 30% and 60% of your property’s market value. You usually need to be 60 or over to take out a home reversion plan.

You receive a tax-free cash lump sum or regular payments, or both, and can stay living in your home, rent-free, as a tenant, without any interference from the provider. You also remain responsible for the upkeep of your home.

When you die or go into long-term care, your home is sold and the home reversion provider gets their share of the proceeds from your estate, with anything remaining going to your beneficiaries.

If you’re considering home reversion, find out what happens if you die soon after taking out a plan, as some plans will offer a rebate, known as capital protection.

Is releasing equity a good idea?

If your home has grown in value since you first bought it, you may see equity release as a useful way to unlock that cash without having to sell up.

But equity release is a big decision, so make sure you consider the alternatives and take advice from a qualified equity release adviser. The Financial Conduct Authority regulates equity release, which means providers and advisers of these plans have to meet clear standards. You can only take out equity release through an independent adviser.

Keep in mind that if you take out an equity release plan:

  • It may impact your eligibility for means-tested state benefits, like pension credit and council tax reductions.
  • It will reduce how much inheritance you can leave to loved ones.
  • Compared with selling it on the open market, you won’t get the full value of your home.
  • Compound interest mounts up over time, which means paying a high amount of interest on top of the original loan by the end of the agreement.
  • You’ll usually need to pay an arrangement fee and other charges at the outset, including the cost of legal advice.

Most lifetime mortgages offer a ‘no negative equity’ guarantee. Plans approved by the Equity Release Council come with this as standard. This means the total amount owed will never be more than the value of the property, even if the value drops substantially. Make sure this is included in the terms and conditions of your deal.

» MORE: Pros and cons of equity release?

Is there a better alternative to equity release?

Consider other ways to unlock the value of your home, or raise the cash you need, before taking out equity release, which may not be the cheapest way to borrow. These might include:

  • Moving to a home that costs less, perhaps in a cheaper area, or by downsizing.
  • Remortgaging, where your lender agrees you can borrow more than you currently owe on a mortgage. Though older borrowers may find it harder to pass affordability checks, and a bigger mortgage will increase monthly repayments.
  • A retirement interest-only mortgage, which lets you remortgage an interest-only mortgage in later life without interest rolling up.
  • An unsecured or other secured loan, which you repay over time.
  • Grants from the government for making your home energy efficient or for other improvements.
  • Considering if family or friends could provide financial support.
  • Drawing on investments, savings or other assets.

Who can get a lifetime mortgage?

You need to be at least 55 to be considered for a lifetime mortgage, and the property must be your main residence. If it’s a joint application, this applies to both applicants.

How much you can borrow depends on things like your age, your health and lifestyle, and the value of the property. You’ll usually need to be mortgage-free or only have a small amount left to pay off your mortgage. If you have any outstanding mortgage amount, your lender will usually ask you to repay it from the money you receive through equity release.

Depending on the lender, there may be a minimum amount you can borrow, usually £10,000, and a minimum property value. The older you are, the more money you’ll usually be able to borrow.

Can I pay off a lifetime mortgage?

A lifetime mortgage is designed to run for the rest of your life or until you move into long-term care, without any repayments needed.

But if you’re looking to pay some of the interest or capital in your lifetime, you may be able to make monthly or occasional partial repayments, depending on the plan you choose, and within the lender’s permitted limits.

If you want to pay off the lifetime mortgage in full, perhaps because you want to sell your property, the sale amount will need to cover the outstanding loan amount and the interest, and you may be charged a redemption fee. You may also have to pay an early repayment charge for settling the outstanding loan balance ahead of time.

It’s important to speak to a financial adviser and ask questions, so you’re clear about the fees and early repayment charges of the plan you’re looking to take out.

Can I transfer a lifetime mortgage?

You may be able to transfer your lifetime mortgage to a new property, if you move home. This is called porting your loan. The new property will need to meet the lending criteria of your plan provider.

If your new home has a lower market value than your current home, your lender may not want to lend as much money against it and you may need to pay off some of the debt. The type of property and its condition is also relevant to its potential value when sold. If the property has a higher market value and you want to borrow more, you’ll need to speak to a financial adviser to make sure it’s the right decision for you.

If you’re planning to port your lifetime mortgage, tell your provider in good time. You should also factor in any potential valuation fees and legal costs.

Can I remortgage a lifetime mortgage?

It’s possible to remortgage to another deal with your current provider, or by moving to a different lender. You may want to do this to take advantage of lower interest rates, to reduce the debt that will need to be paid when the agreement ends.

This could potentially save you money, though consider any fees and costs for remortgaging, and if you’ll have an early repayment charge. How much this will be depends on the lender and the calculation they use, as well as when you first took out the lifetime mortgage.

Can I sell my house if I have a lifetime mortgage?

You can sell your home if you have a lifetime mortgage and ask to transfer your equity release to the new property, if it meets your lender’s criteria and is considered a suitable alternative property. For example, your lender may ask questions about when and how a house was built, to reduce the risk of structural problems in the future that could affect the value when it’s sold.

If your provider doesn’t allow this, or you don’t want to transfer your loan, you’ll need to pay off the whole amount when you sell the property.

Can I buy a house with a lifetime mortgage?

It’s possible to use a lifetime mortgage to help raise funds to buy a new home. This could mean using the equity from the sale of another property, or other savings, as a deposit, and using a lifetime mortgage to make up the rest of the purchase price. So it might cover the shortfall if you’re looking to move to a more expensive home, for example.

What is Fluent Lifetime?

Fluent Lifetime is an equity release and later life broker that’s part of Fluent Money Group, based in Greater Manchester. It was awarded Best Financial Adviser in the five or fewer advisers category at the 2021 Equity Release Awards.

What services does Fluent Lifetime offer?

You can talk to Fluent Lifetime’s qualified equity release advisers about the options, based on your circumstances. They’ll search the market and compare suitable plans and, after a second chat, if you decide you want to go ahead, they prepare the paperwork and an independent solicitor will check the agreement before you sign. It usually takes eight to 10 weeks for the whole process, from application to the money being released.

You can use the MyFluent app to track your application online, get in touch with your case manager, and carry out electronic ID checks to speed things up.

All plans recommended by Fluent Lifetime have a ‘no negative equity’ guarantee, so you’ll never owe more than your home’s value.

Fluent lifetime does not offer home reversion plans.

About the author:

Holly champions clear, jargon-free writing. She’s been creating finance content for leading organisations for over 10 years. Read more

The information contained on this page has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 by Fluent Lifetime Ltd, an appointed representative of Fluent Mortgages Ltd who are authorised and regulated by the Financial Conduct Authority firm registration number 458914.

A lifetime mortgage is a form of equity release. Think carefully about securing other debts against your home, which you could lose if you fail to meet the terms of the mortgage. Check the mortgage meets your needs if you want to move or sell your home, or you want your family to inherit it. Lifetime mortgages can affect tax and benefits. To understand the features and risks of a Lifetime Mortgage, ask for a personalised illustration..

Fluent Lifetime is a Lifetime Mortgage broker, not a lender. They are not limited in the range of lifetime mortgages they will consider for you. Fluent Lifetime does not offer home reversion plans. Fluent Lifetime Ltd. Registered in England and Wales. Company Registration No.11226852. Data Protection Reference number ZA451714. Registered Office: 102 Rivington House, Chorley New Road, Horwich, Bolton BL6 5UE. Telephone 01204 472060

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