What is a Lifetime Mortgage?

A Lifetime Mortgage is a type of Equity Release plan where you unlock a lump sum of tax-free cash from your home. You continue to own your home with this type of plan.

There are different types of equity release plans to think about. The main two are a Lifetime Mortgage and a Home Reversion Plan. They both let you access tax-free cash.

How does a Lifetime Mortgage work?

With a Lifetime Mortgage, the money you release is a loan that’s secured against your property. If you still have a mortgage you’ll need to use the money you release to pay this off first and then you can use whatever is left over to spend on what you like.

The loan, plus any interest, is then paid back from your estate when you die or move into long term care. This means that the amount you can pass on to your loved ones from your estate will be less.

Pros and Cons of a Lifetime Mortgage

Releasing cash from your home might not be right for you. Here’s a quick look at the key things to think about, so you can make a choice that’s right for you:

Pros

  • You get a lump sum of tax free cash
  • You still own your home
  • Once you’ve paid off any mortgage, you can spend the leftover money however you like
  • There are different types of Lifetime Mortgage to choose from, giving you more choice

Cons

  • The money you release from your home is paid back from your estate when you die or enter long term care. This means the amount of money you can pass on to loved ones will be less
  • The money you release from your home could affect any means-tested benefits you’re entitled to now or in the future
  • The money you get is a loan and will build up interest. This means the amount which will need to be paid back will grow over time
  • If you want to pay back the Lifetime Mortgage early you would have to pay extra charges

See if you're eligible for a Lifetime Mortgage

Simply fill in a few details and find out how much money you could unlock from your property.

What you can do next

If you’d like to know more about Lifetime Mortgages or start the Equity Release process, here are some next steps you can take:

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Important information

If you decide to release money from your home, the money you get would be a loan. It gets paid back after you die along with any interest, meaning the amount you have to pass on as inheritance could go down. Any means-tested benefits may also be affected.

You will speak to an adviser before releasing any money and they’ll make sure you understand the whole process.

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