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26 January 2026
Hub page introduction, criteria and FAQs added
12 December 2024
First Published
A quick overview of lifetime mortgages
A lifetime mortgage is the most popular type of equity release in the UK. They allow homeowners over the age of 55 to borrow against the equity in their property and release it as a tax-free loan that doesn’t need to be repaid until they die or enter long-term care.
You can read more about them in our complete guide to lifetime mortgages.
Key features of lifetime mortgages
Here are the main features of lifetime mortgages that distinguish them from regular home loans.
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They are specifically designed for older borrowers
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There are no mandatory monthly payments
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Enhanced terms are available for those with serious health conditions
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You must be a homeowner to qualify for a lifetime mortgage
Eligibility criteria and other requirements
To qualify for a lifetime mortgage you need to be a homeowner over the age of 55.
This table shows the lending requirements for lifetime mortgages at a glance.
|
Criteria |
Requirement |
|
Minimum Age |
You must be 55 or older (based on the youngest applicant). |
|
Property Ownership |
You must own your home outright or have significant equity. If you have an existing mortgage, the funds released must usually be used to pay it off first. |
|
Maximum Loan-to-Value (LTV) |
Typically up to 50%, though this varies by lender and age. |
|
Minimum Property Value |
Your property must usually be worth at least £70,000 - £80,000. |
|
Property Type |
Must be your main residence. Restrictions often apply to ex-council flats, sheltered housing, or properties of non-standard construction. |
|
Location |
Most lenders require the property to be on the UK mainland. |
|
Minimum Loan Size |
Lenders typically have a minimum loan amount of £10,000. |
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FAQs
No, the money you release through a lifetime mortgage is a loan, not income, so it is tax-free. However, if you place the funds into a savings account, the interest you earn on that savings might be taxable.
It can. Having a large sum of cash in the bank could affect your eligibility for means-tested benefits such as Pension Credit or Council Tax Reduction. Your advisor will carry out a "benefits check" to ensure you don't accidentally lose essential income.
Setting up a lifetime mortgage typically involves a valuation fee, solicitor’s fees, and an advice fee. Some lenders may also charge an arrangement fee. Your advisor will provide a full illustration of these costs before you proceed.
There are several alternatives including home reversion plans, retirement interest-only mortgages and standard mortgages with flexible age limits. Speak to a later life lending adviser for a full review of which product is the best fit for you.
Get expert advice about all your mortgage & finance needs
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
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