How does a lifetime mortgage work?

A lifetime mortgage is a type of equity release that allows you to access some of the equity that’s tied up in your home. It’s a long-term loan that’s secured on your property.

Even though it’s a mortgage, you don’t have to make regular repayments. The loan and interest will be paid back in full, usually by selling your property when you (and your partner if it’s a joint lifetime mortgage) die or move into long-term care (remember – Terms and Conditions apply for this).

You’re charged interest on the amount you borrow as well as on the interest that’s already been added, which quickly increases the amount you owe. Taking out a lifetime mortgage will reduce the amount of inheritance you are able to leave and may affect your tax position and eligibility for welfare benefits.