Lifetime Mortgage

If you’re over 55 and own your home, there’s a good chance you’ve built up a lot of value in it over the years. But while your house may be full of memories, it can also be a valuable financial asset — one that can give you tax-free cash without selling up or moving out.

That’s exactly what a lifetime mortgage is designed for. It’s a flexible way to turn some of your property wealth into money you can actually use — now, when it may matter most.

Let’s take a closer look at how it works, what the benefits are, and what you need to know before taking the next step.

A lifetime mortgage is the UK’s most popular type of equity release — and it’s easy to see why. It lets you borrow money secured against your home, but unlike a typical mortgage, you don’t need to make monthly repayments. Instead, the loan (plus interest) is repaid when your home is sold, either after you pass away or move into long-term care.

The best part? You stay in your home, you keep full ownership, and the money you release is completely tax-free.

Some people use the cash for home improvements, others to top up their retirement income, help family members onto the property ladder, or enjoy a few long-overdue holidays. The point is — it’s your money to spend how you choose.

Here’s the basic idea: if your home is worth more than you owe on it (or you own it outright), you can take out a loan against its value. You get the cash now — as a lump sum, a series of smaller payments, or both — and nothing needs repaying until the plan ends.

Because you’re not making monthly payments (unless you want to), the interest gets added to the total each month. That’s called compound interest — it means interest builds on interest. But you’ll always be shown what your loan will grow to, and you can even make voluntary payments to keep the balance under control.

There are also interest-only lifetime mortgages, which let you repay the interest as you go. That way, your debt never grows beyond the amount you originally borrowed.

And if you’re worried about leaving something behind, many plans allow you to protect a portion of your home’s value to guarantee an inheritance for loved ones.

Not everyone’s needs are the same, which is why there are several types of lifetime mortgages available:

• Lump sum plans: Great if you want a one-off payment for a big project or expense.
• Drawdown plans: Ideal if you’d rather access the money gradually and only when needed.
• Interest-only plans: Suitable if you want to stop the loan from growing.
• Enhanced plans: If you have certain health conditions or lifestyle factors (like smoking or high blood pressure), you could qualify for lower interest rates or a higher loan amount.

Some lenders even offer lifetime mortgages for second homes or buy-to-let properties. There’s more choice now than ever before — and a good adviser can help you find the plan that suits your situation.

It varies from person to person. How much you can unlock depends on your:

• Age (the older you are, the more you can borrow)
• Property value
• Equity in your home
• Location
• Health and lifestyle (for enhanced plans)

Most lenders allow you to borrow between 25% and 60% of your home’s value. There’s usually a minimum release amount, often around £10,000.

To give you an idea: according to industry figures, the average drawdown customer released around £115,243 in 2024

You don’t need to be mortgage-free or own a mansion to qualify. You’ll usually be eligible for a lifetime mortgage if:

• You’re aged 55 or over
• You own a home in the UK
• Your property is worth at least £70,000
• If applying as a couple, the youngest homeowner must be 55 or older

Different lenders may have different criteria, which is why personalised advice is so important.

While lifetime mortgages are a safe and regulated way to access property wealth, they’re still a serious decision — and it’s important to go in with eyes open. Here’s what to consider:

• Interest adds up over time, especially if you don’t make any repayments.
• The size of your estate will shrink, reducing what’s left for your family.
• Gifting money to family may trigger inheritance tax implications.
• Early repayment fees can apply if you decide to pay off the loan sooner than planned.
• Means-tested benefits could be affected by the extra cash you release.

A qualified adviser will help you understand all of this in full — so you can make a choice that feels right, not rushed.

A lifetime mortgage can be a powerful way to make the most of your home’s value in later life — whether that’s for comfort, support, or simply a bit more financial freedom.

It’s not about borrowing recklessly or risking your family’s future — it’s about unlocking options, with the right protections in place.

Modern plans are safe, flexible, and regulated — and with guidance from an experienced adviser, you can find one that fits your life, your goals, and your peace of mind.

Is a lifetime mortgage the same as equity release?
Not exactly — it’s a type of equity release. The other is a home reversion plan, where you sell part or all of your home in exchange for a lump sum. With a lifetime mortgage, you stay the legal owner of the property.

Will I have to make monthly payments?
Not unless you want to. Most people choose plans with no mandatory repayments. But if you want to control how much interest builds up, some plans let you pay some or all of the interest as you go.

What about fees and setup costs?
There are costs involved, much like with a standard mortgage. You might have to pay for a property valuation, legal advice, and lender fees. Your adviser will explain all costs upfront so you can plan accordingly.

Are the interest rates competitive?
They can be. In fact, recent reports have shown rates as low as 3% on some plans. Most lifetime mortgages come with a fixed interest rate for life, so rising rates won’t affect your loan. Variable rate options are also available if you prefer more flexibility.

Is this available across the UK?
Yes — lifetime mortgages are available in England, Scotland, Wales, and Northern Ireland.

Equity release can be helpful, but it’s not the best fit for everyone. If the amount you’re able to release falls short of what you need, there are other routes worth exploring:

• Downsizing – Selling your home and moving somewhere smaller could free up the extra funds you’re looking for.

• Retirement Interest-Only (RIO) Mortgage – This lets you borrow against your home while only paying the interest, so your debt doesn’t grow over time.

• Pension Annuity – If a steady income is what you’re after, an annuity could be an alternative. It turns your pension savings into a guaranteed income for life.

Not sure which option is right for you? A qualified adviser can talk you through the pros and cons of each, helping you find the approach that fits your plans and priorities.