Equity Release Lifetime Mortgage

Equity Release Lifetime Mortgage

Equity release lifetime mortgage schemes are specific forms of equity release schemes, which enable the borrower access to a cash sum or an income, which may be paid back to the equity release lifetime mortgage provider during the term of the arrangement, or at the end of the arrangement. Our advisers are specialised in supplying support and advice to clients seeking equity release lifetime mortgage products.

The arrangement may end if the borrower dies or has to enter a care institution, due to long term declining health. There are three individual schemes associated with an equity release lifetime mortgage; interest only schemes, interest rollover schemes, or home income plans.

An interest only scheme allows the borrower to pay monthly interest payments, whilst being able to pay the full amount of the loan when the contract is terminated. Interest rates may either be variable or fixed for an interest only scheme. Interest only schemes may benefit younger borrowers, as many use the equity release lifetime mortgage to pay off loans that already exist. However, the individual may struggle to keep up with the monthly repayments of interest, especially if the cash generated from the equity release lifetime mortgage is fully contributed to clearing a previous loan.

Interest rollover schemes enable the borrower to pay the interest along with the mortgage debt at the end of the contract. If interest rates are variable, interest is tallied up every month over the course of the arrangement and then added to the sum of the mortgage debt. Benefits of interest rollover schemes include the borrower being guaranteed occupancy for life, as well as the liberty to use the generated capital or income as they wish. However, interest rollovers may be a risky option, if interest rates are allowed to vary; it may result in a rapid rise in interest rates, which would reduce the overall equity left in the estate.

Home income plans require the borrower to repay the mortgage loan and interest rates through fixed monthly instalments. Borrowers may use the generated cash sum to obtain an annuity, which provides a guaranteed lifetime income. There are different types of annuities; a level income (the quantity of money received each month remains constant) an escalating income (payments are amplified each month), guaranteed income (the individual selects a fixed payment duration) and a joint life (suitable income for couples).

The income from the annuity could be used to fund the monthly mortgage and interest    payments. This equity release lifetime mortgage plan is useful for individuals who are currently encountering financial difficulties, as it enables them to retain occupancy in the property. However, failure to sustain the payments over the length of the contract may result in severe consequences. By receiving assistance from our dedicated consultants, professional advice will be provided to our clients on whether home income plans are a suitable method of gaining additional income.


Equity release lifetime mortgage may not be suitable for some individuals, as it may lead to a considerable amount of debt on the borrower’s behalf. Individuals must be certain that an equity release lifetime mortgage loan will serve a long term benefit to their needs. Our specialist advisers offer each client a high-quality level of advice on equity release lifetime mortgage schemes, and will suggest the appropriate form of action to take when arranging an equity release lifetime mortgage.

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This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.