Lifetime Mortgage
Who is it for?
Our Lifetime Mortgage is a type of Equity Release mortgage that provides a lump sum loan with no monthly payments.
It's available from age 55 with no maximum.
You can use it to release some of the money built up in your property, without having to sell it. The amount borrowed (plus any charges or interest accumulated) is usually repaid when you pass away or move into long-term care.
You'll always own your home, and it will never be repossessed, as long as you stick to the terms and conditions.
How does it differ from a normal mortgage?
There are many differences – a key one is that you don't need to make any monthly payments. You can make partial repayments of up to 10% of the loan amount within each year, starting from the date your loan completes, without incurring an early repayment charge.
If you don't do this, the interest will 'roll up' or compound monthly, which increases the total amount you owe.
Who is it for?
A Lifetime Mortgage could be suitable for a wide range of circumstances, including:
- If you don't intend to make payments each month
- Remortgaging an existing loan
- Generating funds e.g., for home improvements
- To start a ‘bank of mum and dad’
- Inheritance tax planning and wealth management
Important information
All borrowers will require independent legal advice.
Key Points:
Available from 55 years old:Your lifetime mortgage can begin once you turn 55, with no maximum age limit.
No monthly payments needed:You don't need to make any payments but you can choose to pay up to 10% each year. If you choose to make monthly payments they need to be at least £200.
Downsize Protection:There are no early repayment charges (ERCs) after 5 years if you move to a property that doesn't meet our lending criteria.
Roll-up / Compound Interest:Any interest you don't pay each month is added to the total loan balance. Interest is then charged on the new balance, meaning the amount you owe can grow quickly. This is known as compounding (or 'rolled-up') interest.
Equity Release Council approved:Thanks to the No Negative Equity Guarantee safeguard upheld by Equity Release Council members, the amount of money you borrow against the value of your home, plus any rolled-up interest, can never be more than the value of your home.