A lump sum lifetime mortgage is one of the most straightforward and widely used forms of equity release in the UK. Here we’ll explain what a lump sum lifetime mortgage is, how it works, which companies offer them, along with where to get expert advice to compare providers and find the best rates.
What is a lump sum lifetime mortgage?
It’s a form of equity release where you borrow a single, pre-agreed tax-free sum against the value of your home. You retain full ownership of your property, and no monthly repayments are required. Instead, interest is added to the lump sum loan over time (referred to as “rolled-up” interest).
The total loan balance from your lifetime mortgage lump sum is usually repaid when the property is sold after you pass away or move into long-term care. This type of lifetime mortgage is often chosen by homeowners who know exactly how much money they need upfront.
How do they work?
With a lump sum lifetime mortgage, the lender agrees how much you can borrow based on several factors, including your age, property value, and sometimes your health or lifestyle.
Once you’ve gotten some expert advice, compared your options across lump sum lifetime mortgage providers, and had your application accepted, the process then looks like this:
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You receive the full lump sum in one payment.
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Interest starts accruing immediately on the entire lump sum.
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No monthly repayments are required (unless you choose to make voluntary payments).
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The loan and interest are repaid when the property is eventually sold.
Find out if you’re eligible
Eligibility for a lump sum lifetime mortgage is typically based on a few key criteria:
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Age: Usually age 55 or over (some lenders start at 50 for certain products).
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Property value: Typically must be worth at least £70,000.
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Loan-to-value (LTV): You can usually borrow between 20% to 60% LTV based on your home’s value.
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Property type: Usually must be standard construction with mainstream providers.
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Location: Most UK mainland locations are acceptable (some rural areas may require a specialist provider).
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Minimum borrowing: Certain companies require you to borrow a minimum sum, often around £10,000.
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Health and lifestyle: Some lenders may also offer enhanced borrowing terms if you have certain health conditions or lifestyle factors.
Unlike traditional mortgages, there are no income or affordability checks, as no monthly repayments are required. This is part of the reason why equity release is such a valuable form of later-life lending.
A specialist equity release advisor can quickly confirm whether you’re eligible, who are the best lump sum lifetime mortgage companies to approach, and how much you may be able to borrow.
How to get a lump sum lifetime mortgage
Equity release advice is heavily regulated in the UK, so expert guidance is required before you can go ahead with it, and the typical process looks like this:
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Speak with a qualified, independent equity release advisor.
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Review whether a lump sum lifetime mortgage suits your goals.
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Compare products from across providers.
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Decide how much you need to release as a lump sum.
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Complete the valuation and legal process.
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Get your tax-free lump sum once the mortgage completes.
If you’d like a free initial chat with a lifetime mortgage advisor to get a better grasp of where you stand and what your options are, you can get started below.
Get 100% independent equity release advice
How much can you borrow?
Most lenders allow you to release between 20% and 60% of your property’s value, depending on your age and circumstances.
The total amount you can borrow with a lump sum lifetime mortgage depends on:
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Your age (older borrowers can usually release more)
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Your property value and location
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The type of property and construction (non-standard constructions may result in borrowing less)
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Health or lifestyle factors (for enhanced products)
Online lifetime mortgage calculators can provide a rough estimate, but they don’t account for lender-specific criteria or product features. A specialist advisor can give you a more accurate figure based on your circumstances and show how different borrowing amounts affect the long-term costs.
Examples of lump sum lifetime mortgage providers
Most UK equity release providers offer lump sum lifetime mortgages, but their approach to equity release can differ in terms of flexibility, features, and interest rates. Here are a couple of examples of popular lump sum lifetime mortgage companies:
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Aviva: There’s plenty of flexibility with a lump sum lifetime mortgage from Aviva. You can repay up to 10% of the amount borrowed each year (£50 minimum payment). Interest rates are fixed for life, there’s the option to add an inheritance guarantee, and there’s a no negative equity guarantee.
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Legal & General: Lump sum lifetime mortgages from Legal & General include a no negative equity guarantee, and optional features like inheritance protection, where you can ring-fence a portion of your home’s value. You need to be at least 55 (or 50 with the Payment Term Lifetime Mortgage), and your home must be worth at least £70,000 to £100,000 (depending on your property type).
Alternatives to this type of equity release
A lump sum lifetime mortgage isn’t the only way to release equity, and it’s not always the most cost-effective option; you may also want to explore:
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Drawdown lifetime mortgages: Where you take funds in stages from a cash reserve facility to smooth out payments and reduce the interest build-up.
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Enhanced lifetime mortgages: You may be able to qualify for enhanced products with better rates or higher LTVs.
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Retirement interest-only (RIO) mortgages: You make monthly interest payments on the loan, but are left with a larger inheritance to pass down.
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Downsizing: Selling your home and moving to a smaller property.
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Using savings or pensions: If you have access to funds or a private pension.
A specialist advisor can help you compare these options and decide which approach best suits your financial needs and long-term plans.
Why choose Money Helpdesk for your lifetime mortgage?
Finding the right support to help meet your financial goals in later life can feel overwhelming. We can make the whole process more straightforward by introducing you to experienced, independent advisors who specialise in lump sum lifetime mortgages and other types of modern equity release products.
Here’s why homeowners choose Money Helpdesk to help them arrange equity release with a lifetime mortgage:
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Access to 5-star rated equity release advisors
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Free initial chat with no obligation to proceed further
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Whole-of-market comparison of lifetime mortgage providers
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Expert guidance with access to exclusive rates and deals
If you’re considering a lump sum lifetime mortgage and want to speak to an expert advisor for a free initial discussion, you can get started here.
FAQs
Lump sum lifetime mortgage interest rates are usually fixed for life. They are often slightly lower than drawdown lifetime mortgage rates, but because interest accrues on the full amount from day one, the total cost can be higher over time. It’s best to get an expert advisor to run the numbers for you, depending on your individual goals.