Lifetime Mortgage Providers In the UK In 2022

Legal & General

• Legal & General have two main types of mortgage schemes: Flexible Lifetime Mortgages and Optional Payment Lifetime Mortgages.
• Both of these schemes come with the ability to borrow more in the future if you don’t take the maximum amount at the beginning of the mortgage. However, later withdrawals may have different interest rates.
• Cashback and Inheritance Protection are offered.
• Income Lifetime Mortgages are also on offer. This is where you receive an initial lump sum and then a tax-free income every month over a fixed term of 10, 15, 20, or 25 years.

LV=

• The minimum initial advance or lump sum is £10,000.
• With LV=’s Lump Sum Lifetime Mortgage, you may be able to borrow more in the future, but there is no guarantee of this.
• Their Flexible Mortgages have a maximum loan of either three times the initial amount, or the maximum LTV (whichever is less). You can draw down from this cash reserve over the next 15 years. Each withdrawal must be £2,000 or more.
• Two free revaluations are included in the Flexible plan so that you can increase your maximum loan amount if the value of your home has increased.

More 2 life

• More 2 Life have the widest variety of lifetime mortgage services. Their different categories are: Prime, Maximum, Tailored, Capital, and Flexi.
• Their LTVs range from 5% to 56%.
• Different plans have different features, including Inheritance Protection, Downsizing Protection, Repayment Charge Exemption, Partial Repayments, and cashback.

Nationwide Building Society

• There are no valuation or product fees for Nationwide’s equity release mortgage.
• £1000 cashback upon completion of the application. This can help cover the costs for the independent advice that you must seek before taking out a lifetime mortgage.
• You can pay back up to 10% of the loan each year without incurring any charges.

OneFamily

• OneFamily’s lifetime mortgages have both fixed and variable interest options.
• They also offer both Standard LTV and Super LTV fixed rate services. Super LTV products are for those aged 70-100. They allow you to borrow more money (45-58% loan-to-value), but at a higher rate.
• Downsizing Protection is included after the 5th year.

Pure Retirement

• This lender offers two ranges of lifetime mortgages: Pure Max Drawdown, and Pure Sovereign.
• The Pure Max Drawdown products have higher LTVs and a cash facility. Pure Sovereign schemes have a lower maximum LTV and lower interest rates.
• Pure Retirement may cover the costs of the arrangement and legal fees for you upon completion of the application, but they do not guarantee this.

Responsible Lending

• Responsible Lending has both lump sum and drawdown later life mortgages available.
• All of their lifetime mortgage rates are fixed and you will not pay interest month by month. The interest simply compounds on the initial amount of money loaned over the full length of the mortgage.

Scottish Widows

• You can use a drawdown facility for the first seven years of your mortgage
• The mortgage is portable, so you can transfer your loan to another house if you want to move. Downsizing and Inheritance Protection are also in place.
• You can make voluntary interest repayments without being charged an ERC.

No matter which later life mortgage provider you choose, you need to speak to a specialist financial adviser to make sure you properly understand all the details. 

They will be able to answer any questions you may have about the different mortgage options and help you find the right product. The adviser will also be able to talk you through the impact that a lifetime mortgage can have on your tax position, means-tested benefits, and pension credit.

What is the interest rate for a lifetime mortgage?

The majority of lifetime mortgages have a fixed rate for the entire term. The exact rate depends on the lender, the amount you are borrowing, and the type of product that you select.

The cheapest services start between 2.5% and 3% AER, but it is not unusual for a plan to be fixed at 4-6% AER.

The interest will continue to roll-up until you die or move into long-term care. At this point, they will sell your house and your debt will be repaid with the proceeds of the sale.

This means that debt can compound quickly on your initial loan, leaving less money for your family to inherit once you die. However, the Equity Release Council’s no negative equity guarantee means that you will never owe more than the value of your home.

Can you buy a property with a lifetime mortgage?

It is becoming increasingly popular for customers to buy a new property with a lifetime mortgage.

When you sell the home you are currently living in, you can secure a lifetime mortgage against the property you are moving to. This means you can supplement your savings and the proceeds of the sale with the money you get paid through equity release.

For example, imagine you sell a property valued at £200,000 and want to move into a house worth £250,000. You can use lifetime mortgage services to release £50,000 from the new property so that you can afford the purchase.

You should call a professional money expert to get financial advice on what is best for your situation.