What Is Lifetime Mortgage and Equity Release?
If you are over 55 and want to make the most of the value tied up in your home, or boost your income in retirement, equity release may be worth considering. We provide independent, FCA-regulated advice on lifetime mortgages, the most common type of equity release in the UK. A lifetime mortgage lets you set up a tax-free lump sum or a flexible drawdown facility without selling your house or having to move.
Our qualified equity release advisers are on hand to guide you through the equity release process and compare lifetime mortgages from across the whole of the market to find the right fit for your circumstances.
Working with UK Mortgage Broker, you get independent, whole-of-market advice, comparing deals from across the market rather than a single panel of lenders, so any recommendation is based on what suits you, not what is easiest to sell.
What Is a Lifetime Mortgage?
A lifetime mortgage is the most common form of equity release. It lets you borrow against the value of your home while retaining full ownership. Nothing gets paid back until you die or go into long-term care, at which point your home is usually sold to clear the loan and whatever interest has built up. There are no monthly repayments required, so it is a way to access money tied up in your property without changing your day-to-day budget.
Key Benefits of a Lifetime Mortgage
- Tax-free lump sum or drawdown facility
- Remain the legal owner of your home
- No monthly repayments required
- Fixed or capped interest rates for life
- Optional inheritance protection
- Right to remain in your home for life or until you need long-term care
The No Negative Equity Guarantee
Every lifetime mortgage we arrange complies with the Equity Release Council’s product standards, which include the No Negative Equity Guarantee. This means neither you nor your estate will ever have to repay more than the amount your home sells for, even if that value is lower than the outstanding loan. You will never leave your family with mortgage debt from an equity release plan taken out on these terms, whatever happens to house prices or interest rates over the life of the loan.
Why Choose Equity Release?
Equity release is one option, among several, for homeowners in the UK who want to access money tied up in their property without moving out. People use it for things such as:
- Paying off an existing mortgage
- Helping family members with a deposit or tuition fees
- Improving or adapting your home
- Funding a significant purchase, such as a holiday
- Supplementing retirement income
A lifetime mortgage may suit some of these goals, but it is not the right answer for everyone, and it is worth weighing the downsides alongside the benefits before deciding.
Things to Consider Before You Apply
Equity release reduces the value of your estate, which can affect how much you leave as inheritance. It can also affect your entitlement to means-tested benefits, such as Pension Credit or Council Tax Support, and it is usually a more expensive way to borrow than a conventional mortgage or, where realistic, downsizing to a smaller property. A qualified adviser will talk through these trade-offs with you, alongside alternatives, before you commit to anything, and independent legal advice is a mandatory part of the process for exactly this reason.
How Does Equity Release Work?
1. Free Consultation – we start with a conversation about your circumstances and what you are hoping to achieve, so we can work out early on whether equity release is even the right direction for you.
2. Whole-of-Market Comparison – from there, we look at lifetime mortgage plans across the market rather than a single lender’s range, narrowing things down to what actually fits your situation.
3. Independent Legal Advice – before anything is signed, you sit down with an independent solicitor who can walk you through exactly what you are agreeing to.
4. Release Your Tax-Free Cash – once everything is approved, the money lands in your account, either as one lump sum or as drawdown payments you can call on over time.
5. Lifetime Tenure – after that, there is nothing more to pay monthly, and you stay put in your home for as long as you want, under the terms set out in your plan.
Who Is Eligible for a Lifetime Mortgage?
Here is what you will typically need to qualify for a lifetime mortgage:
- You are aged 55 years or older
- Own a property in the UK worth at least £70,000
- Seeking to borrow at least £10,000
- Your home is your primary residence
We work with clients across the UK from all kinds of backgrounds and circumstances, and we are happy to talk it through with you either way – there is no cost and no obligation for that first conversation.
Example – Lump Sum Lifetime Mortgage
Client: Sarah, 70 years old
Property value: £300,000
Equity release type: Lump sum lifetime mortgage
Amount released: £90,000 (30% of property value)
At 70, Sarah wanted to help her daughter get onto the property ladder and pay for a kitchen renovation of her own, so she released a one-off lump sum of £90,000. She makes no monthly repayments. When she dies or moves into long-term care, the loan and any interest accrued will be repaid from the sale of the property, and thanks to the No Negative Equity Guarantee, her estate will never owe more than the sale proceeds.
Our Equity Release Broker Services
As whole-of-market equity release brokers, working with lifetime mortgage lenders across the UK, we provide the following to our clients:
Independent Advice – we compare deals across the whole of the market so any recommendation is based on your circumstances, and we are directly authorised and regulated by the Financial Conduct Authority.
Access to a Broad Range of Lifetime Mortgage Plans – we work with lenders across the market, including plans not always available direct to consumers.
Free, No-Obligation Quote – there are no upfront costs, and no pressure to proceed. We provide free consultations, advice and equity release illustrations.
Ongoing Support – our equity release advisers walk you through the process step by step and remain available for the duration of your plan.
Paperwork Handled For You – equity release applications involve a fair amount of paperwork. We complete this with you rather than leaving you to work through it alone.
Example – Drawdown Lifetime Mortgage
Client: John, 65 years old
Property value: £280,000
Equity release type: Drawdown facility
Initial amount released: £40,000
Reserve facility: £50,000 (available to withdraw later, interest-free until used)
John set aside a £50,000 reserve and took an initial £40,000 to supplement his pension. He only pays interest on the amounts he actually withdraws from the reserve, but can access it when needed, for example a further £10,000 later for a holiday.
Lifetime Mortgage vs. Home Reversion Plans
| Feature | Lifetime Mortgage | Home Reversion Plan |
|---|---|---|
| Retain home ownership | Yes | No – part or all is sold |
| Tax-free cash release | Yes | Yes |
| What happens on death/care | Loan plus interest repaid from sale proceeds | Provider takes its agreed share of the sale proceeds – there is no loan or interest to repay |
| Monthly repayments | Optional | Not required |
| Protected inheritance | Yes (with protection) | Limited |
Frequently Asked Questions
Who is eligible for equity release?
You will typically need to be at least 55 years old, be a homeowner, and hold a property of a certain minimum value in the UK.
Your property needs to be worth at least £70,000, and you need to be looking to borrow at least £10,000.
What are the different types of equity release plans?
There are two main types of equity release.
Lifetime mortgages are the most common type and let you borrow against your home while keeping ownership. Home reversion plans involve selling all or part of your home in return for a cash payment, so you no longer own that share outright.
How much money can I release from my home?
How much you can release depends mainly on your age, the value of your home, and sometimes your health.
As a general guide, most lenders release somewhere between 20% and 60% of your property’s value, with older applicants typically able to release a higher proportion.
Will I still own my home with a lifetime mortgage?
Yes. A lifetime mortgage does not change whose name is on the deeds.
You stay the legal owner throughout, with the right to live in your home for as long as you want, or until you need long-term care.
Do I have to make monthly repayments?
No. You can make monthly repayments if you want to, but nothing forces you to.
Skip them and the interest simply rolls up, to be settled out of your home’s sale proceeds when the plan comes to an end.
What happens to the loan when I die or go into care?
The loan and any interest accrued are repaid from the sale of your home.
Any money left over after the loan is repaid goes to your family or estate.
Can I still move home after taking out equity release?
Yes, most equity release plans are portable.
Your new home just needs to meet whatever lending criteria your provider applies at the time you move.
What does the No Negative Equity Guarantee actually mean?
It means your debt is capped at whatever your home sells for, however the numbers work out.
It is a standard requirement for all plans that meet the Equity Release Council’s product standards, so even if your home’s value falls, the amount you or your family owe can never exceed the sale proceeds.
Could equity release affect my benefits or what I leave behind?
It can, on both counts.
Releasing equity lowers the value of your estate, which naturally reduces what is left for inheritance, and it can also affect means-tested benefits like Pension Credit. Worth talking through both with a qualified adviser before you go ahead.
Is equity release actually safe and properly regulated?
It is.
The Financial Conduct Authority regulates equity release, and every provider we work with signs up to the Equity Release Council’s product standards on top of that – things like your right to stay in the property for life, rates that are fixed or capped, and the No Negative Equity Guarantee.
What is the first step if I want to explore equity release?
Contact us to speak with a qualified equity release adviser.
Call us on +44 1628 969 500 or use the contact form and we will provide a free, no-obligation quote and talk through your options.
Summary
For UK homeowners aged 55 and over, equity release is one option for accessing money tied up in a home without having to move. The most common type, a lifetime mortgage, offers either a lump sum or drawdown payments taken as needed, secured against the home.
The loan is repaid when the homeowner dies or moves into long-term care, usually from the sale of the property, and the homeowner retains ownership throughout. Every plan meeting Equity Release Council standards also carries a No Negative Equity Guarantee, so neither the homeowner nor their estate will ever owe more than the property sells for.
UK Mortgage Broker specialises in equity release, offering personalised guidance to help clients decide whether it is a good fit for their circumstances. We assess each client’s situation individually, talk through the trade-offs, and support you through the full application process, including the paperwork.
We are directly FCA-regulated, and part of that job is making sure you go in with your eyes open – not just the upside, but how it could affect your inheritance and any means-tested benefits too.
Conclusion
For older homeowners looking to fund home improvements, supplement their income, or help family members financially, equity release can offer flexibility, but it is not right for everyone and is worth weighing against alternatives such as downsizing or a conventional loan. Working with an independent broker such as UK Mortgage Broker means you get tailored guidance based on your own circumstances, alongside the independent legal advice you will need before any plan completes.
UK Mortgage Broker is an independent mortgage broker, directly authorised and regulated by the Financial Conduct Authority. We help homeowners and property investors throughout the UK and overseas.
Call: +44 1628 969 500
Email: info@uk-mortgagebroker.co.uk
Related Pages
- Residential Mortgage UK – if a conventional mortgage or downsizing looks more suitable than equity release for your circumstances, this covers how residential mortgages work, deposits, rates and lender criteria.
- Buy To Let Mortgage UK – for landlords weighing up equity release against remortgaging an investment property, our guide to buy-to-let lending and criteria.
- Remortgage UK – if you still have monthly repayments on your existing mortgage, find out when remortgaging pays off compared with releasing equity instead.
- Types of Mortgage in the UK – see how a lifetime mortgage compares with other UK mortgage types, including repayment methods and rate structures.