What is a Lifetime Mortgage?
A Lifetime Mortgage is a long-term loan that allows homeowners over 55 to unlock tax-free cash from their property. This can be used as wished, for example, to clear an existing mortgage or purchase a new property.
Unlike other equity release products, with a Lifetime Mortgage you retain full homeownership. You don't need to make monthly payments and the interest will instead roll up at a rate that is fixed for life. The amount borrowed, plus interest, is only due when the last surviving homeowner dies or enters long-term care and the home is sold.
Who can get one?
A Lifetime Mortgage could be the right choice for you if you:
- Are at least 55 years old
- Want to borrow at least £10,000
- Own or want to purchase a home worth at least £70,000
- Are able to clear any existing mortgage on your property, either using the equity released or additional funds.
Our Later Life Lending Service
Royal London is customer-owned, so you can trust that your needs are at the heart of everything we do. We take pride in offering choice and have made sure that our partners work as hard as we do when it comes to providing the very best service.
We have chosen to partner with specialist broker Responsible Life to deliver the Later Life Lending Service. They have years of experience and success in helping their customers to consider their financial options and use their property to achieve their goals.
No requirement to make regular monthly payments – unless you choose to make them
Only paid back when the last surviving homeowner dies or enters long-term care, usually by the sale of your property
No-negative-equity guarantee so you will never owe more than the value of your property
Flexibility to suit different needs - take a single lump sum or release a smaller initial amount and create a reserve of further funds with a drawdown
Interest rates are typically fixed-for-life.
Important things to know
- Taking from the value of your home now will reduce the value of your estate
- A tax-free cash injection could affect your entitlement to means-tested benefits
- To understand the features and risks, speak with an adviser.
To help you find out if the features of a Lifetime Mortgage could be right for you, Royal London have partnered with later life lending specialists Responsible Life. They have provided the equity release calculator below for you to use. You'll get an estimate in minutes, plus a free guide to later life lending.
Talk to our partner Responsible Life
Got a question about your later life lending options? The UK-based Responsible Life team are here to give you the information you need so that you can be sure you choose the right solution for you.
Lines are open Monday to Friday, 9am to 8pm and Saturday, 9am to 5pm, excluding bank holidays.
Or if you prefer, you can schedule an appointment for the Responsible Life Information Team to call you back.
The advice process
Speak to Responsible Life
Call the Responsible Life Information Team, based in the UK.
Consider options with an adviser
The Information Team can arrange a no-obligation appointment with a fully qualified mortgage adviser.
Make an application
Your adviser will help you through the application process and every application will receive an extra review from a second qualified expert.
Frequently asked questions about lifetime mortgages
Do I need to sell my property?
No. A Lifetime Mortgage involves borrowing against your home, not selling it. You still own your property, and you don’t have to move out.
Can I purchase a property with a Lifetime Mortgage?
Yes. Lifetime Mortgages are most commonly used to unlock cash to spend on clearing an existing mortgage, making home improvements and gifting an early inheritance. However, it is possible to purchase a new property with a Lifetime Mortgage and there are some buy-to-let products on the market.
An adviser can explain how purchasing a property with a Lifetime Mortgage works in greater detail.
How do I pay back what I owe?
There are no required repayments with a Lifetime Mortgage. Interest rolls up over time and the total amount owed is paid back after the last surviving homeowner dies or enters permanent long-term care. Usually, this is achieved with the sale of the home.
You can make voluntary payments during your lifetime to mitigate the impact of interest roll-up, but there is no requirement to do so.
Why do I have to seek advice before releasing equity with a Lifetime Mortgage?
The decision to take out a Lifetime Mortgage is a big one, particularly as doing so will reduce the value of your estate and could affect your entitlement to means-tested benefits. Therefore, it is essential to receive financial advice so that you understand the features and risks.
By speaking with one of Responsible Life’s advisers, you can determine if a Lifetime Mortgage is the right choice for you. They will provide a personalised illustration as well as explain the different features available.
If you are interested in a Lifetime Mortgage, why not give Responsible Life’s Information Team a call on 0800 023 9313? They would be happy to help.
How much can I unlock?
You can use the free and instant equity release calculator to find out how much you could release with a Lifetime Mortgage. The calculator will use your age and the value of your home to give you an estimate of the cash available.
When you have filled out your information and completed the calculator, you will receive a free guide to later life lending, both by email and in the post.
Is it regulated?
Yes, Lifetime Mortgages are regulated by the Financial Conduct Authority (FCA).
How much does it cost?
There are several costs that could be involved when considering this product option. As part of the application process, consider whether there will be related fees in having the property valued, costs charged in the engagement of a solicitor, and an application fee charged by the lender. If purchasing a property, then potential stamp duty and conveyancing fees should also be within your thoughts.
When enquiring through our Later Life Lending Service, there is also the advice fee to bear in mind. The advice fee charged will depend on the product that you choose and the complexity of your case, but the provider of our service, Responsible Life, guarantee that it won’t exceed £1,690. By charging a capped rate as opposed to a percentage of the amount borrowed, you won’t pay more simply for wanting to borrow more. The advice fee can be paid with existing funds, or you can choose to add it into the amount borrowed.
Looking for something different?
If you're not sure whether a Lifetime Mortgage is for you, there are other later life lending options you could consider instead.
Retirement Interest-Only Mortgages (RIO)
- Unlock value from your existing property or purchase a new one
- Repay only the interest each month with fixed rates available
- Repayable by the sale of your property upon death or entry to long-term care of the last surviving homeowner.
Traditional mortgages for over 55s
- Unlock value from your existing property or purchase a new one
- Make monthly interest repayments or capital and interest payments
- The option to set the term of the mortgage, subject to approval.
Royal London have chosen Responsible Life to provide our customers with advice on Later Life Lending products. The Royal London Mutual Insurance Society Limited has a 30% shareholding in Responsible Life and Responsible Lending (Responsible Group) and are part of the same group under FCA disclosure rules.
Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205.
If you choose a mortgage with required repayments during your lifetime then your home may be repossessed if you do not keep up with the payments. A Lifetime Mortgage or Retirement Interest-Only Mortgage will impact the value of your estate and could affect your entitlement to means-tested benefits. Think carefully before securing other debts against your home.
To understand the features and risks, ask for a Personalised Illustration. Responsible Life’s adviser will talk through the setting up costs of a mortgage before you make any decision to proceed. Only if you choose to proceed and your case completes will Responsible Life charge an advice fee, currently not exceeding £1,690.
If you take out a product recommended by Responsible Life, Royal London Marketing Limited will receive a fee, for this introduction. If you would like further details about this fee, Responsible Life will be able to provide you with this. More information about Responsible Life and how your information is processed is available on their privacy notice. Find out how Royal London manages your personal data.
Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority, registration number 302391. Registered in England and Wales number 4414137.
Responsible Life's registered office is: Mills Bakery, Royal William Yard, Plymouth, PL1 3GE. Registered in England & Wales. Company number 7162252.