What is a lifetime mortgage?

A lifetime mortgage (sometimes known as ‘equity release’) is a loan, secured against your home, which allows you to access some of its value without having to sell it or move out. The money you access is tax-free and can be used as you wish, providing any existing mortgage is paid off first.

Unlike most other secured loans such as a traditional mortgage, you do not need to make monthly repayments (unless you choose to do so). The amount you borrow, plus interest which rolls up over the course of the mortgage, is paid back from the sale of the property when the last remaining applicant passes away or moves into long term care. Most lifetime mortgages feature a ‘no negative equity guarantee’, meaning you will never owe more than the value of your home when sold.

The amount you can release through a lifetime mortgage depends on two characteristics; the age of the youngest applicant, and how much your property is worth. The older you are and the more valuable your property, typically, the more you can release.

A lifetime mortgage will reduce the value of your estate and could affect your entitlement to means tested benefits.

 

Who is eligible for a lifetime mortgage?

You may be eligible for a lifetime mortgage if: 

  • You’re aged 55 to 84 
  • You’re a UK homeowner 
  • Your home is worth at least £99,000 

Even if you meet the minimum criteria above, it doesn’t mean a lifetime mortgage is necessarily the right choice for your circumstances. That is why it’s important to speak to a qualified adviser who can help advise as to whether a lifetime mortgage would be suitable for you.  

If you don’t already have a relationship with a qualified adviser, we can put you in touch with our preferred advice partner, Key Advice Solutions, who provide advice exclusively on the Standard Life Home Finance Sunrise product range. Standard Life Home Finance are a leading independently operated provider of lifetime mortgages, authorised and regulated by the Financial Conduct Authority. Find out more about Standard Life Home Finance on our legal page.

 

What are the main types of lifetime mortgage?

With a lifetime mortgage, there are two ways to unlock funds from your home. One is taking all the money in one go; known as a lump sum lifetime mortgage, and the other enables you to take it in chunks as and when you need it, following an initial release. This is known as a drawdown lifetime mortgage.

  • Lump sum lifetime mortgage:

    With a lump sum lifetime mortgage, you receive all the money you release in one go and there are typically no monthly repayments to make unless you choose to. 
       

    This can be ideal if you have several expenses to cover at once, such as making home improvements, repaying existing mortgage or debts, or gifting to a family member.  
     

    A lump sum lifetime mortgage could cost more over time - compared with drawdown - as interest is applied to the full release amount from day one.

  • Drawdown lifetime mortgage:

    A drawdown lifetime mortgage is like a lump sum lifetime mortgage, but instead of receiving your funds in one lump sum, you can take the money as and when you need it following an initial release of at least £10,000.  
     

    This could be more suited to your needs if you do not need all your money upfront and want access to funds later down the line. It could also work out cheaper – as you only pay interest on the money you release.  
     

    Drawdowns are subject to the prevailing, fixed interest rate at the time, which may be higher than the original interest rate. A drawdown facility is not guaranteed as the lender has the right to withdraw it.

When you speak with a qualified adviser, they will take the time to understand your individual circumstances and provide you with the most appropriate solution. If a lifetime mortgage is the right product for you, your adviser will talk to you about the nuances of lump sum and a drawdown lifetime mortgages, to best match your situation and needs.

 

How does applying for a lifetime mortgage work?

Step 1

Call Key Advice Solutions to book an appointment with an adviser at a time that suits you. You can request for your appointment to be over the phone, face to face, or via a video call. You may also want to invite family members to the call so that they can ask any questions they have.

Step 2

Your dedicated adviser will take time to answer your questions, understand your personal circumstances and advise as to whether a lifetime mortgage is a suitable option for you or not.

Step 3

Your adviser will send you a recommendation of which Standard Life Home Finance lifetime mortgage is most suitable for you, including a personal illustration of the how much the loan amount will cost over time. If Standard Life Home Finance products are not right for your circumstance, your adviser can direct you to an adviser who can look at other product providers.

Step 4

If you do decide to proceed, your adviser will help you through the application process which includes having your property valued and involving a solicitor to review the legalities.

Step 5

Once you confirm you are happy, you can submit your application. It typically takes around 8-12 weeks from submitting an application to completing the process.

Step 6

Your money will be released for you to start enjoying however you wish.

Step 1

Call Key Advice Solutions to book an appointment with an adviser at a time that suits you. You can request for your appointment to be over the phone, face to face, or via a video call. You may also want to invite family members to the call so that they can ask any questions they have.

Step 2

Your dedicated adviser will take time to answer your questions, understand your personal circumstances and advise as to whether a lifetime mortgage is a suitable option for you or not.

Step 3

Your adviser will send you a recommendation of which Standard Life Home Finance lifetime mortgage is most suitable for you, including a personal illustration of the how much the loan amount will cost over time. If Standard Life Home Finance products are not right for your circumstance, your adviser can direct you to an adviser who can look at other product providers.

Step 4

If you do decide to proceed, your adviser will help you through the application process which includes having your property valued and involving a solicitor to review the legalities.

Step 5

Once you confirm you are happy, you can submit your application. It typically takes around 8-12 weeks from submitting an application to completing the process.

Step 6

Your money will be released for you to start enjoying however you wish.

Next steps

  • Speak with an adviser

    Introduce me to your external advice partner who can tell me more about lifetime mortgages

  • How much can I borrow?

    Calculate how much money I may be able to access from my home

  • Hear from other customers

    Show me stories from others who have taken a lifetime mortgage