Busting the myths of lifetime mortgages

12 November 2021

A lifetime mortgage is a form of equity release. Equity release is about giving people the flexibility and choice to unlock cash from their home in later life. But a lifetime mortgage is a big financial decision – and a lot of myths remain about how they work.

We’ve busted some of the biggest myths around lifetime mortgages.


“I won’t own my own home anymore”

Having a lifetime mortgage does not mean you are selling your home to the lender. It’s a loan secured against your home that will be repaid when you die or move out of your home into long term care.


“I’ll end up paying more than the value of my home – my children will inherit my debt”

Lifetime mortgages are protected by the Equity Release Council’s “no negative equity” guarantee; you, or your estate, will never owe more than the value of your home. This means you will never have to pay back more than the amount your property is sold for.


“I won’t be able to move house”

You can transfer the lifetime mortgage to a new property, providing the property is suitable. Get in touch with your adviser if you want to check property suitability.


“I already have an outstanding mortgage – I can’t release equity.”

Even if you have an outstanding residential mortgage, you can still release equity – providing you use the lifetime mortgage to repay the outstanding residential mortgage first. This is dependent on the equity available and the terms and conditions of the mortgage.


“I’ll have to make monthly repayments with a lifetime mortgage”

Some products offer the option to pay off interest, but you are not obliged to make repayments. You may prefer to allow the interest to roll up and be repaid when you die or move into long term care. There is a range of products to suit your needs.


“Equity release is just a last resort for people desperate for money”

People say they have or would take out a lifetime mortgage for many reasons. More than a third use the money to refurbish and renovate their home. 17% use the money for a dream holiday and 13% use the money to help buy a new vehicle.


Other important information to consider

  • Interest is added to the amount you owe each month, and the amount owed will increase quickly over time.
  • If you’re considering repaying debts, you should think carefully before securing debts against your home.
  • Arrangement fee applies.
  • There may be cheaper ways to borrow.
  • A lifetime mortgage will reduce an inheritance.


Contact us

For more information on how a Lifetime mortgage could help you and how much you could borrow contact the team using this form or call 020 3745 5893 to discuss your options further. 

As this is a lifetime mortgage, to understand the features and risks, ask for a personalised illustration. Our initial consultation is free and then if you wish to proceed, there will be a fee of £495 payable upon application for our Lifetime Mortgage Service. We will also receive commission from the lifetime mortgage lender.