A lifetime mortgage is similar to a standard mortgage: it is a loan which is secured against your property’s value. In other words, you are using the value of your home as security for borrowing money. The loan is repaid out of the future sale of the property, generally when you die or, if you are a couple, when the surviving partner dies or goes into long term care.

No monthly repayments

The main difference with a lifetime mortgage is that, during your borrowing period, you make no monthly repayments. However, some providers have the option of paying all of the interest and some of the capital on an ad hoc basis, thus avoiding the effect of ‘rolled up’ interest.

Interest

Interest is added to the loan and is repaid at the end. Lifetime mortgages are for life, as the name suggests – there is no set term – so that you can enjoy the peace of mind that comes from knowing that you can stay in your family home for the rest of your life or for as long as you choose.

Property value

Over time, the loan will increase in value, with the addition of interest, but this can generally be offset by the increase in the value of your property. We would recommend speaking to a specialist, who can explain the impact if your property increased (or decreased) in value over time