Glossary · UK
What is Lifetime Mortgage?
The most common form of equity release, letting older homeowners borrow against their property with no required monthly repayments.
Full Definition
A lifetime mortgage is the most common type of equity release in the UK. It lets homeowners, typically aged 55 or over, borrow a lump sum or drawdown against the value of their home while continuing to live in it. Unlike a standard mortgage, you usually make no monthly repayments; instead, interest is added to the loan and compounds over time. The total debt, plus rolled-up interest, is repaid when you die or move into long-term care, normally from the sale of the property. Reputable products carry a no-negative-equity guarantee, so you will never owe more than the home is worth. Because interest compounds, the amount owed can grow quickly and significantly reduce any inheritance, and it may affect means-tested benefits. The amount you can borrow depends on your age and property value (the loan-to-value). Independent advice is required before taking one out. Consider the impact on your estate and Inheritance Tax position.