A lifetime mortgage is an attractive option for older homeowners looking to borrow money. In this article we answer some of the key questions about lifetime mortgages including:

  • What is a lifetime mortgage?
  • How does a lifetime mortgage work?
  • What is the maximum you can borrow on a lifetime mortgage?

Read on to discover lifetime mortgages explained…  

What is a lifetime mortgage?

A lifetime mortgage allows homeowners aged 55 and over to take out a loan secured against the value of their home and, as the name suggests, it’s a mortgage you can have for the rest of your lifetime. 

A key difference between a residential mortgage and a lifetime mortgage is the term of the loan. Residential mortgages typically have a loan term of 35 years or less. However, with a lifetime mortgage the loan plus interest does not need to be repaid until you go into long term care or die. 

How does a lifetime mortgage work?

Lifetime mortgages offer a lot of flexibility to borrowers. For example, you’re not obliged to make any repayments throughout the duration of the loan, although you can if you wish to. Borrowers can repay some of the interest, all of the interest or more than the interest. You can also stop and start repayments when it suits you. What’s more, if you wish to repay the entire loan in full, you can, although you may be liable to pay an early repayment charge.

When you take out a lifetime mortgage you can choose a plan that allows you to ring fence a portion of the equity in your home so you can guarantee an inheritance for your family.

Your home is typically sold when you go into long term care or die and the proceeds from the sale are used to repay the lifetime mortgage.

What is the maximum you can borrow on a lifetime mortgage?

The amount of money you can borrow when taking out a lifetime mortgage is dependent on the value of your home, the age of the youngest applicant at the time of taking out the plan and, in some cases, your health. If you have a history of medical conditions you may be eligible to borrow more.

The amount you can borrow is also dependent on whether you have an outstanding mortgage or any other loans secured against your property.

Find out how much you could borrow using our Equity Release Calculator

What can a lifetime mortgage be used for?

When you take out a lifetime mortgage you can spend the money however you wish. Some of the most popular reasons why people access the equity in their home are to:


  • Pay off an outstanding mortgage
  • Clear credit cards and other debts
  • Make home improvements
  • Boost their retirement income
  • Retire sooner
  • Pay for care home fees
  • Provide financial support to their family
  • Go on holiday
  • Make the most of retirement
  • Facilitate a divorce settlement

Are lifetime mortgages safe?

Yes, lifetime mortgages are safe. There are several guarantees in place to protect borrowers. For example, those guarantees include:

  • The no negative equity guarantee – this means you will never owe more than your property is worth and so there is no concern about leaving your loved ones with debt
  • Lifetime mortgages are regulated by the Financial Conduct Authority
    You are never at risk of repossession, you still own your home and can continue living there for life
  • You will never be expected to make any repayments if you cannot afford to or you simply don’t want to
  • With some lenders you have the right to move home and transfer the lifetime mortgage to your new property – when you take out a lifetime mortgage you should check whether your lender allows this

It’s important to note that many of these guarantees are only applicable if you take out a lifetime mortgage with a lender that is approved by the Equity Release Council. The Equity Release Council is the industry body for the sector and represents lenders, advisers, solicitors and intermediaries.

You can check whether a company is a member of the Equity Release Council on their website.

Is a lifetime mortgage the same as equity release?

Yes, a lifetime mortgage is a type of equity release plan and is the most popular type of plan. Another type of equity release is home reversion.

What does Martin Lewis think about lifetime mortgages?

Martin Lewis highlights the importance of seeking advice when it comes to equity release and lifetime mortgages. He says:

“A qualified advisor will be able to compare equity release deals from across the market. This means you’ll get the best advice and be recommended products tailored to your circumstances.”

Ready to find out more?

At Personal Retirement Planning we are proud members of the Equity Release Council and we’re qualified equity release advisers. We help homeowners to understand their options with clarity so they can make a well-informed decision about whether equity release is right for them.

One of our lifetime mortgage customers recently shared their feedback on Trustpilot, they said:

“Excellent service. Listened to what I was looking for and gave me a range of options that met my needs. Quick, efficient and very personable. I wholeheartedly recommend PRP. A pleasure to do business with.”

If you’d like to speak to Barry, one of our advisers please email barry@prpltd.co.uk or call 0203 435 9561. We look forward to answering any questions you may have.