The Best Lifetime Mortgage Providers in the UK – 2024

Think of a lifetime mortgage as a long-term partner. You wouldn’t rush into a relationship without getting to know the person first, right?

The same goes for lifetime mortgages. These financial agreements allow you to tap into your home’s value without selling or moving, but they come with variations in rates, fees, and features.

Hence, choosing the right provider can be challenging. And that’s where research and professional advice come in.

Whether you’re ready to talk to an expert or just exploring your options, understanding what to look for is essential.

This article will teach you everything you need to know to make an informed decision about lifetime mortgage providers. In the coming sections, we’ll guide you through the key considerations, helping you feel confident and well-prepared.

What Should You Know About Lifetime Mortgage Providers?

Lifetime mortgages are different because providers don’t look at your ability to repay monthly to decide how much you can borrow. This is because monthly repayments aren’t required.

Here’s what you should know to make the best decision for you:

• Most providers will let you take out a lifetime mortgage at age 55, but some specific plans may start at 65. You’ll also find that some providers have an upper age limit, usually between 80 and 95.
• Every provider will need to know the value of your property, so an appropriate valuation is a must.
• Some providers, especially those in the Equity Release Council, might give you fixed interest rates. Some even let you pay the interest early instead of letting it add up.
• Some providers may go up to a 60% loan-to-value (LTV) ratio.

It’s all about finding what fits you best, so take the time to understand these points, and you’ll be on your way to making an informed decision.

How to Select Your Ideal Lifetime Mortgage Provider?

Picking the right lifetime mortgage provider is much like choosing the perfect car, and you may be surprised to learn how many options are tailored just for you. Let’s break it down:

When you’re looking for a lifetime mortgage provider, always look for providers that are members of the Equity Release Council (ERC) and are authorised and regulated by the Financial Conduct Authority (FCA). 

ERC membership ensures adherence to a code that’s designed to protect you, and FCA regulation adds an extra layer of trust.

Being a member of the ERC requires providers to offer a no-negative equity guarantee. This safeguard protects your loved ones from inheriting a debt greater than the value of your home.

If you’re considering an equity release, it’s important to seek help from an equity release advisor or broker. They already have a thorough knowledge of the available products and can guide you to the right provider for your circumstances.

What Else Should You Know Before Choosing a Lifetime Mortgage?

Your decision regarding a lifetime mortgage shouldn’t be solely based on the provider’s reputation. There are underlying details that can significantly impact your long-term financial well-being. 

Here’s an in-depth look into details that you must take into account:

Interest Rates

Each provider offers different rates. Some offer fixed rates, while others might offer tracker rates that follow market changes. They are influenced by different factors like

• Your age, health, and lifestyle.
• Property value, location, and condition.
• Loan-to-Value Ratio or the amount you wish to borrow
• Economic Factors such as the Bank of England’s base rate

Fees

Buying a lifetime mortgage isn’t just about the interest rate. There are other fees to consider, like arrangement and valuation fees. Some might be flat rates; others might be a percentage of the loan.

Think of it like this: If you’re getting a £100,000 lifetime mortgage, a 1% arrangement fee would add £1,000 to your upfront costs. Add in a valuation fee of £200, and these extra costs can start to stack up.

Having a handle on these fees helps you plan your budget. So there are no surprises when it comes time to sign on the dotted line. It’s all about being prepared and knowing what to expect, so you can make the most informed decision possible.

Features

Not all lifetime mortgages are created equal. Look for features such as:

Cash Drawdown Facility

The Cash Drawdown Facility offers a flexible way to access your home’s equity. Instead of taking out all the funds at once, you can withdraw money in stages, paying interest only on the amount you use. 

It’s like having a financial cushion for various needs such as home improvements or healthcare, without incurring unnecessary interest.

Downsizing Protection

This feature offers peace of mind if you want to move to a smaller place. It ensures that early repayment charges won’t apply if you decide to downsize. 

This flexibility protects your finances, making a move to a less expensive home a hassle-free experience.

Mortgage Porting

This is about flexibility in relocating. If you decide to move, you can take your existing lifetime mortgage with you. This means you can keep the same terms and avoid new application fees or penalties. 

It simplifies the process of changing homes and helps in maintaining the continuity of your financial plan.

Optional Repayments

With optional repayments, you have control over your loan balance. You can make voluntary payments toward the loan or interest, helping to retain more of your home’s equity. 

While not obligatory, this feature offers you a hands-on approach to debt management, potentially leading to significant savings in the long run.

Inheritance Protection

With inheritance protection, you can guarantee that a portion of your home’s value will be left to your loved ones, regardless of how much interest you accrue on your mortgage.

This is a great way to provide a secure financial legacy for your family and ensure that they inherit your home.

Who are the Best Lifetime Mortgage Providers in the UK?

Finding the right lifetime mortgage provider is crucial for you. Here’s a look at some of the big players in the market, each with its unique offerings tailored to various needs.

Aviva

Aviva is known for its flexible drawdown facility and offers both downsizing protection and mortgage porting.

Canada Life

Canada Life not only allows you to borrow against a second home but also offers a drawdown facility if you need it. Providing an inheritance guarantee and allowing you to repay up to 10% of the loan each year.

Just

With Just, your health conditions might get you a better rate through medical underwriting. Additionally, you can also get a lower rate if your home has an energy efficiency rating of A or B. 

If you have specific health concerns or an energy-efficient home, exploring Just’s options could be beneficial for you.

Legal & General

Legal & General gives you two options: a lump sum or a flexible drawdown. You can’t make regular repayments, but you can make optional, partial ones whenever you like. If you want a mortgage that’s both simple and versatile, consider this option.

LV

From lump sum to drawdown mortgages, LV has various options, including an inheritance protection guarantee. If leaving a legacy is important to you, consider LV.

More2Life

More2Life stands out with a wide range of features like a cash facility, inheritance protection, downsizing protection, early redemption charge exemption within 3 years of the death of one borrower, and partial repayments. If you’re looking for customisation, More2Life might be for you.

Pure Retirement

Pure Retirement stands out for its outstanding customer service and professional conduct. Working exclusively with independent financial advisers representing clients, they signal a commitment to professionalism. Plus, they are known for offering competitive rates.

Scottish Widows

Scottish Widows offers fixed interest rates, a cash facility, inheritance protection, and mortgage porting, giving you stability. 

The early repayment charges get lower each year after taking out the loan. If you like knowing exactly what to expect, Scottish Widows might be the choice for you.

Standard Life

Standard Life provides both lump sum and drawdown lifetime mortgages that start from £10,000. You can repay up to 10% of the original loan amount every year without any charges. 

They also include features like mortgage porting, downsizing protection, and inheritance protection. If you want regular repayments and versatility, take a look at what Standard Life offers.

Do Banks and Building Societies Offer Lifetime Mortgages?

In the UK, you’ll find that not many banks and building societies offer lifetime mortgages, with Scottish Widows and Santander being notable exceptions. 

Often, banks advertising equity releases might simply guide you towards one of the specialised equity release companies.

Are there Lifetime Tracker Mortgages Providers?

Lifetime tracker mortgages, which last for the full term of your home loan, bear resemblance to lifetime mortgages but have a critical difference in their fluctuating interest rates. 

Banks and building societies such as Barclays, Halifax, HSBC, First Direct, and Santander offer these mortgages. 

While the interest rate on a ‘tracker’ mortgage can vary, it’s often lower than that of a standard mortgage. This distinction may influence your choice, depending on your financial goals and preferences.

What’s the Maximum You Can Borrow with a Lifetime Mortgage?

The borrowing capacity with a lifetime mortgage is influenced by various factors like home equity, age, property specifics, and the lender’s terms. Generally, you could borrow up to 60% of your equity.

If health conditions limit your lump sum, an enhanced lifetime mortgage might be an option for more substantial borrowing.

What Are the Best Interest Rates for Lifetime Mortgages?

Lifetime mortgage rates tend to range between 5.70% to 8%. Considering the long-term costs, finding the most competitive interest rate is essential. 

To put this into perspective, consider a loan amount of £75,000. At a fixed rate of 6.5%, you could end up repaying £156,071 over 12 years. This may affect the potential inheritance you might leave for your family or other financial plans.

Here’s a table that illustrates how the interest rates could impact the repayment amount for a £75,000 loan over 12 years:

Year	Interest (£0	Loan Balance (£)
0	£0.00	£75,000.00
1	£4,875.00	£79,875.00
2	£5,136.25	£85,011.25
3	£5,452.58	£90,463.83
10	£8,057.06	£138,551.03
11	£8,515.57	£147,066.60
12	£9,004.23	£156,070.83

This example highlights the importance of shopping around and consulting with an equity release adviser to find the best lifetime mortgage rates tailored to your specific needs and financial goals.

Can a Lifetime Mortgage Be Used to Buy Property?

Lifetime mortgages can be leveraged for investment properties or aiding family members in acquiring their homes. Many older homeowners opt for this to assist their children in buying property.

It’s crucial to note that any funds transferred to others might be liable to inheritance tax, especially if done within seven years of your demise.

The Bottom Line

Securing the right lifetime mortgage requires thorough research and professional consultation. Your situation plays a key role, and by understanding your options, you’ll be better placed to make an informed decision.

Every provider offers unique features and benefits, and the choices can be overwhelming. If you’re thinking about a lifetime mortgage, it’s wise to consult a qualified lifetime mortgage advisor. They can guide you through the various options, helping you find a mortgage that suits your specific needs.

Working with an expert broker ensures that you have a deal tailored to your preferences, whether you need cash drawdown, inheritance protection, or fixed interest rates.

When you’re ready to take the next step, simply fill out this quick form. We will connect you with a lifetime mortgage advisor who understands your needs.