LIFETIME MORTGAGE RATES IN 2020 | UK

Lifetime mortgage rates Depending on your retirement income details, you may be looking at a later life mortgage as a way of getting some extra money in retirement. This article will answer the most frequently asked questions about equity release lifetime mortgage interest rates. It guides you through the different options and deals with eligibility requirements.

This page was last updated on Saturday, April 17th 2021

Lifetime Mortgage Rates In 2021 – Find the best lifetime mortage rates available

Depending on your retirement income details, you may be looking at a later life mortgage as a way of getting some extra money in retirement.

This article will answer the most frequently asked questions about equity release lifetime mortgage interest rates.

It guides you through the different options and deals with eligibility requirements.

Topics you will find covered in this article

You can listen to an audio recording of the page below.

What is the average interest rate on a lifetime mortgage?

The majority of lifetime mortgages have a fixed interest rate for life. Therefore, they are sometimes called a ‘lifetime fixed rate mortgage’.

The rate will range between providers and will depend on your individual circumstances and the product that you select.

The cheapest providers will charge lifetime mortgages interest rates starting between 2.5 and 3% AER. But, it is not unusual for a lifetime mortgage equity release plan to have a higher rate of 4 to 6%.

More information and examples about  lifetime mortgage rates  are in this table below.

Best lifetime mortgage rates at 1 April 2021

The table below has the best lifetime mortgage rates you can access today. You can use this to compare lifetime mortgages.

ProviderMaximum loan-to-value (LTV)Monthly rate (fixed for mortgage term)Annual rate (AER)Maximum cash lump sum amount
more2life32%2.38%2.51%£10,000 - £1,000,000
Pure Retirement33.5%2.51%2.57%£10,000 - £725,000
Canada Life28.8%2.58%2.60%£10,000 - £1,000,000
Legal & General38%2.68%2.71%£100,000 - £2,000,000

You can also use releasing equity calculator tools to get more information about how much capital you can release from your home.

What is the difference between equity release and a lifetime mortgage?

Lifetime mortgages are a type of equity release scheme where you take out a loan secured against the value of your home.

A lifetime mortgage scheme unlocks money which is currently tied up in your property. The money you release may take the form of a cash lump sum, or a series of withdrawals you use to top up your pension income or other investments in retirement.

Different types of lifetime mortgage are available, and you don’t have to make mortgage payments unless you choose to pay with a flexible plan.

You can watch a video below that explains how the equity release lifetime mortgage interest rates work.

Try our free equity release calculator and see how much you could borrow in 30 seconds, using the latest lifetime mortgage interest rates

lifetime mortgage interest rates

How does a lifetime mortgage work?

You don’t need to sell your home when you get a life mortgage. You will keep ownership of the property until either after your death or you enter long-term care in later life.

At this point, your house will be sold and the money from this sale will be put towards paying off the loan.

Lifetime mortgage plans are regulated by the  Financial Conduct Authority. The  Equity Release Council trade body approves each lender and builds in safeguards.

For example, the Equity Release Council guarantees that lifetime mortgage customers never end up paying more than the value of their home. This is known as a no negative equity guarantee.

They also protect you if you want to move home, allowing you to transfer your plan to another property agreed by the lender.

A lifetime mortgage may impact your entitlement to receive state benefits and pension credit and it may change your tax position. Speak to an adviser for help understanding the products and how a lifetime fixed mortgage will impact your finances.

You can also use an equity release calculator to receive an estimated quote.

"A lifetime mortgage scheme unlocks money which is currently tied up in your property. The money you release may take the form of a cash lump sum, or a series of withdrawals."

Different lifetime interest mortgages rates?

There are three main types of lifetime mortgage plan, although lifetime mortgage providers call these types by different names. It is important to receive advice from mortgage consultants and a financial adviser before making decisions about which plan is right for your needs.

Roll-up mortgages

You receive a lump sum at the beginning of your mortgage term. Factors such as your age, the value of your properties and assets, any credit commitments you have, and whether you want to secure an inheritance for your family will all affect the total you can borrow.

You should use a lifetime mortgage calculator and speak to a financial adviser for more information on how much you could borrow.

Interest then rolls up on the amount of money that you initially release plus any interest that has already been charged on the loan amount.

Drawdown mortgages

You can release the money from your home in stages using a drawdown lifetime mortgage. Whatever money customers choose not to release will be held in a reserve savings bank account that they can draw from when needed.

Because interest only builds up on the money withdrawn, this minimises the fees you’ll pay when your home is sold at the upon completion of the mortgage term.

Flexible or voluntary payment

Flexible lifetime mortgages grant mortgage holders the option of making ad-hoc monthly payments towards the interest that has accumulated on their loan amount.

These interest payments are voluntary, so customers can choose whether to pay. Homeowners can use flexible features to repay up to 15% per year of the lump sum borrowed.

What is the maximum age for a lifetime mortgage?

There is no maximum age for a lifetime mortgage, but there is usually a minimum requirement of 55. If you apply as a couple, both homeowners must be over 55.

However, if you are older, you can normally borrow larger amounts. A release equity calculator can provide more information.

To be eligible, you must also meet other lending criteria:

  • You must own a property in good condition. This must also be your main residence.
  • The property value must be worth more than £70,000 . Some lifetime mortgage providers also specify that your property must not be sheltered housing, a listed building, or next to commercial buildings, because such homes are harder to sell.
  • You must not have any other mortgages or loans secured against your home, or you must use the money you release to pay off any debts of this type.
  • You must seek financial advice from a professional money adviser.

Please note that the above criteria can change between lenders, which is why we advise that you always speak to a specialist.

Can I pay off life time mortgages?

Most lenders don’t let you repay the loan before the end of the term because they expect interest to build up over the full term. This means debt can accumulate quickly, leaving little for your estate to inherit once you die.

If a borrower decides to end their lifetime mortgage early, they will  incur fees known as an Early Repayment Charge. The exact amount of charges the homeowner will have to pay due to this penalty varies between providers and on the deal they signed.

Some people choose a deal with a flexible or drawdown facility for this reason.

With products that allow you to make ad-hoc interest repayments from your pension savings or retirement income, you can control debt and affordability and leave more wealth to your family.

Some lenders also offer alternatives like  Inheritance Protection as an option when customers apply for a lifetime mortgage.

This alternative will secure a percentage of the proceeds from the sale of your home to leave to your beneficiaries, but the proportion of wealth you choose to secure for your estate will reduce the total lump sum you can borrow with the loan.

If you would like more advice, make an appointment with an adviser.

They will be able to give you advice on retirement interest only equity release lifetime mortgage interest rates. The guides can also talk you through any extra costs you might encounter, such as valuation fees, and make suggestions about alternatives like home reversion.

Contact us to see what todays’ latest lifetime mortgage rates are.  We can also help guide you through the process and answer any questions you might have.  

You can contact us in one of 3 ways:

  • book an appointment directly in the calendar below
  • leave your contact details and we will get in touch with you
  • call us directly on 0800 953 3792

First, check how much money you could receive from equity release then speak to someone, if you have more questions.

1) book an appointment in the calendar below.


2) Call us now and speak to an equity release specialist

You can call us between:

Mon – Thurs – 9am – 8 pm

Friday – 9am – 5:30pm

Saturday – 9am – 5pm

0800 953 3792

3) Leave your contact details and we will get in touch with you

All calls regarding equity release are undertaken by Key Equity Release, the UK’s leading specialist in this area.

More articles about lifetime mortgages

Lifetime Mortgage Providers

The Equity Release Council trade body has 14 members.  These lifetime mortgage providers are authorised and regulated by the Financial Conduct Authority. They all abide by the ERC’s no negative equity guarantee.

What Are Lifetime Mortgages?

Lifetime mortgages are a popular type of equity release where you take out a loan secured against the value of your home. This later life equity release scheme allows you to unlock money that is currently tied up in your property.

home reversion calculator (2)

Home Reversion Calculator

A home reversion equity release calculator is a tool that helps you find out how much money you could receive with home reversion plans. These are different from lifetime mortgage calculators that you often see.

drawdown lifetime mortgage (2)

Drawdown Lifetime Mortgage

A drawdown lifetime mortgage is a type of life mortgage where you can release equity from your home in a series of small withdrawals. This is instead of simply withdrawing one large cash lump sum at the start of the mortgage term.

Lifetime Mortgage Rates

The majority of lifetime mortgages have a fixed interest rate for life. Therefore, they are sometimes called a ‘lifetime fixed rate mortgage’. The rate will range between providers and can change quite often..

Mortgages For Pensioners

If you are a pensioner in later life, you may be considering a lifetime mortgage as a way of supplementing your pension income, paying off debts, supporting family, or paying for home improvements in retirement.

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Frequently Asked Questions

What is the average interest rate on a lifetime mortgage?

The majority of lifetime mortgages have a fixed interest rate for life. Therefore, they are sometimes called a ‘lifetime fixed rate mortgage’.

The rate will range between providers and will depend on your individual circumstances and the product that you select.

The cheapest providers will charge lifetime mortgages interest rates starting between 2.5 and 3% AER. But, it is not unusual for a lifetime mortgage equity release plan to have a higher rate of 4 to 6%.

How does a lifetime mortgage work?

You don’t need to sell your home when you get a life mortgage. You will keep ownership of the property until either after your death or you enter long-term care in later life.

At this point, your house will be sold and the money from this sale will be put towards paying off the loan.

Are there different lifetime mortgages rates?

There are three main types of lifetime mortgage plan, although lifetime mortgage providers call these types by different names. It is important to receive advice from mortgage consultants and a financial adviser before making decisions about which plan is right for your needs.

What is the maximum age for a lifetime mortgage?

There is no maximum age for a lifetime mortgage, but there is usually a minimum requirement of 55. If you apply as a couple, both homeowners must be over 55.