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Scour the market and compare lifetime mortgages
Your mortgage is likely to be your biggest financial commitment, so shopping around for the best deal is vital. We can help by comparing thousands of products from a wide variety of lenders, covering the whole of the market. This way, you can be confident you’re getting the right deal for your needs.
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What is a lifetime mortgage?
A lifetime mortgage is a mortgage taken out on a property that does not have to be repaid until the borrower dies or needs to go into long-term care.
A lifetime mortgage also allows you to release some of the equity (or wealth) that you’ve accumulated in your home over the years. This way, you can benefit from it here and now without having to sell your house to get at it. That’s why lifetime mortgages are also known as ‘equity release’ mortgages.
People who take out lifetime mortgages must be a minimum age of 55. They are often in a position where they have built up considerable equity in their property, since house prices have usually risen in the years since they first bought.
You don’t need to own your home outright to apply for a lifetime mortgage. However, the more of it you do own, the better the deal you get.
How do lifetime mortgages work?
There are two main types of lifetime mortgages. The basic principle remains the same for both types of lifetime mortgage: you take a loan out and agree to pay it back with the proceeds of selling your property after you move out or pass away.
Interest roll-up mortgage: You receive a lump sum or regular payments. Interest is added to the loan, but you don’t make regular repayments. Instead, the interest is calculated – or ‘rolled up’ – as time passes. The full sum is paid off when the house is sold. Your beneficiaries can then keep what remains or you can use it to pay for care
Interest-paying mortgage: This type requires you to make regular interest repayments on your loan. The total amount still owed will be repaid upon your death or when you enter long-term care. Some plans also let you pay off the capital
You’ll probably be able to choose whether you want a large lump-sum upfront or a smaller advance. You may also be given the option of taking out smaller ‘top up’ loans later.
What are the advantages of lifetime mortgages?
Lifetime mortgages are a specialised product designed for people in specific circumstances. In some scenarios, they can be incredibly beneficial to the right person. Here are some of their positives:
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A cash boost
People whose homes have increased in value over the years often don’t feel any richer. This is because the money is tied up in bricks and mortar. A lifetime mortgage lets you take advantage of years of favourable market conditions
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Improve your lifestyle
You can spend the money on making home improvements, replacing your existing mortgage, a new car or those dream holidays
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You can stay at home
Because most people who take out lifetime mortgages are older, they tend not to move until they pass away or move into care. This way, they can enjoy the cash injection without worry
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Reduce inheritance tax liability
Releasing equity on a valuable home and gifting it could help with inheritance-tax planning
What are the downsides of lifetime mortgages?
As with everything, lifetime mortgages may come with a set of downsides too. Depending on your personal circumstances, they may not be the right solution for your needs. Here are a few cons you may want to consider:
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Little to no inheritance
Lifetime mortgages don’t require regular repayments, meaning the interest charged will compound over your lifetime. This means your beneficiaries could end up without any inheritance from your property once you pass away, or move into care. If leaving an inheritance is important please ask your adviser about inheritance protection.
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Extra expenses and less for your loved ones
You’ll face similar expenses to those incurred from an ordinary mortgage, such as arrangement fees, legal costs, and valuation fees. If you take equity out of your home, it will inevitably be worth less. There’ll also be less for your family to inherit once you’re gone
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You have to sell up at the end
To take out a lifetime mortgage, you must agree to sell your property when you move out. So, the family home can’t be passed to the next generation. You may also be limited to what changes you can make to your home and may be obliged to keep it in good condition
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No means-tested benefits
A lifetime mortgage may also mean you are unable to claim means-tested benefits. This could have an impact on how much tax you have to pay. Check with your adviser to see how you will be affected before committing
How do I qualify for a lifetime mortgage?
As with most loans, lifetime mortgages come with their own share of eligibility criteria. Of course, these will differ based on the lender. But usually, in order to qualify for a lifetime mortgage, you would be expected to:
Be 55 years old or older
Own a property that is in good condition, which is also your current residence
Be located in England, Scotland, Wales or Northern Ireland
It’s also worth bearing in mind that some lenders will take into consideration the value and condition of your home before accepting your application.
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Compare lifetime mortgage deals
So, what is a lifetime mortgage? If you want to learn more and are interested in any form of equity release, it’s a good idea to speak to a specialist advisor.
An Independent Financial Advisor (IFA) who specialises in planning for retirement should be able to help you choose the right lifetime mortgage for you.
MoneySuperMarket has partnered with award winning Equity Release Supermarket to offer you lifetime mortgages, as well as other forms of equity-release mortgages.
What is the difference between equity release and a lifetime mortgage?
The truth is that there is no difference at all, for the simple fact that a lifetime mortgage is a type of equity-release plan.
In fact, ‘equity release’ is used a generic term to describe a method to obtain equity from a house or property. When it comes to later-life mortgages, there are many equity-release plans available on the market, including lifetime mortgages (which is one of the most popular options).
Can you pay off a lifetime mortgage in advance?
Yes. If you have the financial ability to do so, you can. That said, it’s worth keeping in mind that lifetime mortgages are not usually intended for short-term loans and borrowing.
This means that they’re likely to come with an early repayment charge (ERC), which tends to be quite expensive in the first few years of your plan. As always, terms and conditions can vary significantly by provider, so make sure to read the small print.
This way, you’ll know exactly what to expect if you decide to pay off your lifetime mortgage in advance.
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Reviewed on 11 Dec 2025