Getting started with lifetime mortgages

Equity release is becoming a popular option for homeowners to access the cash tied up in their home. If your clients are over the age of 55 and looking for a little extra money to enjoy a more colourful retirement, a lifetime mortgage could be the right choice. A lifetime mortgage is a type of equity release, it's a loan secured on your client's home.

To help you get started, we’ve outlined below some reasons why you may want to advise on a lifetime mortgage. There are also some tips and advice on how to get qualified.

Why advise on lifetime mortgages

The lifetime mortgage market is growing. Homeowners in the UK have a collective of £4.6 trillion in property wealth, positioning property as second only to an employer pension as the safest way to save for retirement. 

It’s no surprise that more and more people are using their home as a genuine asset. In 2017, equity release hit £3 billion in lending, having tripled since 2013.
 
Better regulation in the industry and more financial education available means that lifetime mortgages are becoming a more viable option for over 55s to unlock cash in later life.

What are clients using lifetime mortgages for?

During our lifetime mortgage survey, we spoke to UK advisers and asked them, “How are you using lifetime mortgages to help your clients?” Our results showed that: 

table
6 in 10 used the money for home improvements
5 in 10 used the money to repay an interest-only mortgages
5 in 10 used the money for family members (such as starter homes)
2 in 10 used the money to pay for their care
1 in 10 used the money for their divorce

How does a lifetime mortgage work?

Our short animation helps provide an introduction to how lifetime mortgages work, including the risks and benefits.

What are they and how do they work?

What are they and how do they work? video

Use this animation to explain to your client more about lifetime mortgages, the choices available, and how a Legal & General Lifetime Mortgage works.

Transcript: What are they and how do they work?

Running time:

Voice over: Lifetime Mortgages: What are they and how do they work?

You and your home have been on quite a journey.

But it’s not over yet. So how can your home help you now?

Well, with a lifetime mortgage that’s secured against your home, you could unlock some of the cash tied up in your property, as either

A larger single amount, or several smaller amounts, that you can apply to take when you need them.

Interest is only owed when you take the money. You won’t make any monthly repayments.

Instead, interest is charged on both the loan and any interest already owed, and added to the total amount that’s secured against your home.

That means the total you owe can grow quickly, reducing the equity in your home and the value of any inheritance you may leave.

The loan and the interest are only repaid when you die or enter long term care.

The money you release could be the savings you never knew you had, helping you in your retirement.

It’s a big decision, and there are many factors to consider. That’s why you can only get a lifetime mortgage through a qualified adviser.

They’ll ensure that you’re eligible for the product, and can check if it’s the best solution for you.

On screen text: A lifetime mortgage is debt secured against your home.

Interest is charged on the total loan amount plus any interest already charged.

This means the amount you owe grows quickly, reducing the equity left in the property.

A lifetime mortgage will reduce any inheritance.

Think carefully about securing debts against your home.

You may have more cost effective options.

Prefer to talk?

Get in touch with one of our Telephone Account Managers, Kimberley Davis. You can either call her on 0121 7122 744 or alternatively, email her by clicking on the link below.

FAQs

When getting started, it's normal to have a wealth of questions around lifetime mortgages. We've answered some of the most frequently asked questions on the link below.

Events

We’re offering workshops to support mortgage intermediaries to pass the CII Equity Release Exam; the essential mortgages and equity release advice qualification.

If you're contacting us by email please remember not to send any personal, financial or banking information belonging to you or your client because email is not a secure method of communication.