Equity Release Schemes - Lifetime Mortgage
Lifetime mortgage, in its various formats is the most popular type of equity release scheme.
It is a loan, secured against the value of your home & exchanged for a tax free lump sum or
income. The lifetime mortgage charges interest at a fixed rate. This is not repaid monthly,
but added to the mortgage. The balance, including compound interest is finally repaid in full
when the property is sold. This is on death or the last person moving into long term care.
A lifetime mortgage is available from age 55 and unlike a home reversion scheme does NOT involve selling any
part of the property. Therefore, with 100% ownership you retain the right to live in the property for the rest of
your life. Lifetime mortgage schemes are repaid when the surviving person has died or gone into long term care.
Beneficiaries receive the net proceeds from the sale price of the property and the lifetime mortgage repaid.
A lifetime mortgage UK in practice
A roll-up lifetime mortgage requires no monthly payments to be made. Instead, the interest charged is added to
the mortgage balance on a monthly or annual basis. Therefore, the lifetime mortgage balance will increase over
time potentially reducing the beneficiaries inheritance. Nevertheless, over the longer term house prices historically
have risen & this can therefore offset the compounding effect of the interest to some degree.
How is a lifetime mortgage calculated?
On the basis of the age of the youngest applicant & the property valuation are the key determinants for the best
lifetime mortgage. The younger you are, the lower the release of equity will be. Conversely for an older applicant,
the higher the release will be. To calculate how much you could borrow use our online equity release calculator.
What is an enhanced lifetime mortgage?
If there has been a history of ill health, past or present, then an enhanced lifetime mortgage could be available.
Underwriting experience has shown that if certain illnesses have been evident then the normal UK equity release
term could be shortened. As such, some lifetime mortage lenders will offer a larger than standard lump sum.
Professional Equity Release Advice
As you can see, there are many different types of lifetime mortgages available. Compare Equity Release always
recommend anyone considering releasing equity from their home should obtain professional & impartial advice.
Should you wish to benefit from our free initial consultation and discuss the various lifetime mortgages, please
call freephone 0800 678 5169.
Alternatively, complete our online enquiry form and a local adviser will call you back to discuss making a
Further types of lifetime mortgages
The following links help advise & provide key information on ways of releasing equity from your home: -
These are UK lifetime mortgages. To understand the features and risks ask for a personalised illustration.