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.
It can be used to release some of the money built up in your client's property, without having to sell it. The amount borrowed (plus any charges or interest accumulated) is usually repaid when they pass away or move into long-term care.
They will always own their home and it will never be repossessed, as long as they abide by the terms and conditions.
How does it differ from a normal mortgage?
There are many differences – a key one is that your client doesn't need to make any monthly payments, but they can if they want to service some or all of the monthly interest. If they don't do this, the interest will 'roll up' or compound and be added to what they owe.
Who is it for?
A Lifetime Mortgage could be suitable for a wide range of circumstances, including:
- Those who don't intend to make payments each month
- Remortgaging an existing loan
- Generating funds e.g. for home improvements, lifestyle or to start a Bank of Mum and Dad
- IHT planning and wealth management
Intermediaries require the appropriate Equity Release qualification to advise their clients on our Lifetime Mortgage.
All borrowers will require independent legal advice.
- Age 55:
Available from age 55 with no maximum
- No monthly payments:
Your client doesn't need to make any payments or they can choose to pay up to 10% each year. They can make payments every month with a minimum of £200 payment.
- Downsize Protection:
No early repayment charges (ERCs) after 5 years if your client moves to a property that doesn't meet our lending criteria.
- Roll-up / Compound Interest:
Any interest your client doesn't service each month is added to the total loan balance. Interest is then added on top of that, meaning the amount they owe can grow quickly.
- Equity Release Council approved:
An additional option for your clients if you have the relevant Equity Release qualification.
Yes, you need to be Equity Release qualified (CeRER) to be able to advise customers on our Lifetime Mortgage product, and you will also need to hold the certified function (CF21) with the FCA.nswer
As an equity release provider, we’re regulated by the Financial Conduct Authority (FCA). We’re also a member of the Equity Release Council and follow their standards for protecting customers.
If your client takes out a Lifetime Mortgage with us, we also promise that they will never have to pay back more than their home can be sold for, providing that it's sold for the best price reasonably obtainable.
All will be much the same – it will be down to your client to insure their home, and stay on top of all bills. It will also be your client’s responsibility to keep the property in good shape for them to remain in it until they pass away or go into long-term care, subject to our terms and conditions.
In most cases, the sale of the house is when the Lifetime Mortgage is repaid.
Should your client go into long-term care, it will be the family or the solicitor who manages the sale. If your client remains in their home until they pass,it’ll be sold by the executor looking after the estate if they have a will – or by administrators if they don’t have one.
Any money remaining post sale will belong to the clients' estate.
Our Lifetime Mortgage is a type of equity release, and like a RIO, it has no specified end date.
The key difference is that a RIO has contractual monthly interest-only payments whereas a Lifetime Mortgage does not. That means with a RIO you are paying off the interest we charge each month. With a Lifetime Mortgage, we still charge this interest but it is added to the balance that you owe us and compounds over the life of the loan.
Therefore, with a RIO the amount you owe us will remain the same, whereas with a Lifetime Mortgage, it will increase over time.