- A lifetime mortgage is a way to borrow against your home. It’s a type of equity release product.
- The interest rate is fixed for the duration of the lifetime mortgage. And depending on which product you take out, you can choose to pay none, some or all of the interest. Interest is charged on the loan plus any interest already added. This means the amount you owe will increase quickly over time.
- The loan is usually repaid from the sale of your home after the last borrower dies, or moves out of your home and into long-term care.
- If you use a lifetime mortgage to give some or all of the money away, the recipient may have to pay inheritance tax in the future.
- A lifetime mortgage will reduce an inheritance and may affect your entitlement to means-tested benefits.
- There may be cheaper ways to borrow money.
- Arrangement fees may apply.
|With a lifetime mortgage...||With a residential mortgage...|
|The duration of the mortgage is not fixed||The length of the mortgage is set when you first take it out|
|Any unpaid interest charged is added to the amount you owe each month. This is sometimes called compound interest or rolled-up interest.||Interest is calculated either monthly or annually on the remaining loan amount on a specified day.|
|You won't have to make any monthly payments. But some lifetime mortgages allow you to pay some, or all, of the monthly interest.||A monthly payment is required until the end of the loan.|
|You won't have to make any monthly payments. But some lifetime mortgages allow you to pay some, or all, of the monthly interest.||Your income, expenditure and other financial commitments will be reviewed to ensure you can afford the payments.|
|The interest rate is fixed for the length of the loan.||There are a variety of interest rates you can choose from. The most common are variable or fixed.|
Find out how to get more information and advice about taking out a lifetime mortgage.
Why choose a Lifetime Mortgage?
Find out if a lifetime mortgage could work for you.