If you’re over 55 and considering equity release, an enhanced lifetime mortgage might offer better terms and rates than a standard lifetime mortgage, especially if you have certain health conditions or lifestyle factors. Here we’ll walk you through how they work, who can benefit, how to apply, and alternative options to consider.
What is an enhanced lifetime mortgage?
It’s a specific type of lifetime mortgage (a form of equity release) where lenders offer more favourable terms by taking into account specific health conditions, lifestyle factors (such as your smoking history), or other circumstances.
How does it work?
Under a standard lifetime mortgage, your age, property value, and equity determine how much you can release. With an enhanced version, however, lenders may offer:
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A higher maximum loan-to-value (LTV), allowing you to release a higher proportion of your home’s value.
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A lower interest rate or more favourable interest terms.
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Larger drawdown facilities, meaning you can access a higher reserve of funds in future.
It might seem counterintuitive, but the reason that some lenders offer better terms with enhanced lifetime mortgages is that they assume the loan will run for a shorter period (due to underwriting considerations). The result is that they are willing to be more flexible.
Who could benefit from using one?
Enhanced lifetime mortgages are best suited to homeowners who meet the standard criteria for equity release but also have one or more qualifying factors that might otherwise limit their options in a traditional lifetime mortgage, such as:
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People with medical conditions (for example, cancer, heart disease, or diabetes).
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Those with a history of serious illness.
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Current smokers or past heavy smokers.
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Those with somewhat weaker health expectations than the average person.
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Homeowners who want to release more cash than standard products allow.
Because an enhanced lifetime mortgage “rewards” risk factors that shorten the expected loan duration, it can provide more flexibility to people who might otherwise be constrained by standard underwriting for equity release.
Find out if you’re eligible
Eligibility for an enhanced lifetime mortgage builds on the standard requirements for equity release, but involves additional scrutiny regarding your health and lifestyle. Key pieces of eligibility criteria typically include:
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Minimum age: You must usually be aged 55 or over (or whatever minimum the lender sets).
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Property requirements: The property should meet standard valuation criteria (good condition, typical construction, and in an acceptable location).
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Home ownership: You must own the property outright or have a small enough mortgage that you can clear it with the funds from the equity release.
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Health and lifestyle: You’ll be asked various health and lifestyle questions, and each lender will have its own unique criteria for enhanced lifetime mortgages.
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Equity available: The enhanced equity release product may allow a higher release percentage than normal, but only up to the lender’s limit.
If you meet the standard lifetime mortgage requirements, your individual profile could unlock more competitive products, but each lender’s rules vary, so it’s best to speak with a specialist equity release advisor who has access to the whole range of providers.
How to get an enhanced lifetime mortgage
Here are some straightforward steps to follow if you’re thinking about applying for an enhanced lifetime mortgage:
1. Gather your details
You’ll need to provide standard documents, such as proof of identity, address, and property ownership. However, it’s also worth having to hand any medical or lifestyle information that could make you eligible for enhanced products.
This may include information about diagnosed health conditions, prescribed medication, or lifestyle factors such as smoking habits, diet, or your alcohol consumption.
2. Get expert advice
Because enhanced lifetime mortgages are specialist products, it’s crucial to speak with a qualified equity release advisor who understands the market.
An experienced advisor can assess your personal circumstances, review your medical and lifestyle information, and identify which providers are most likely to offer enhanced terms. They’ll also explain how much extra you could get.
3. Apply for an enhanced lifetime mortgage
Once your advisor has gathered all your details and confirmed your eligibility, they’ll introduce you to the most suitable providers.
Your advisor will help you compare interest rates, discuss drawdown options, and manage the entire application from start to finish - including guidance with the property valuation and legal work.
If you’d like to speak to one of our experienced equity release advisors who specialises in enhanced lifetime mortgages, you can get started here with a free, no-obligation chat below.
Connect with a lifetime mortgage expert
Can you borrow more with this type of equity release?
Yes, that’s one of the main benefits of an enhanced lifetime mortgage. Because the lender factors in additional health and lifestyle risks, you may be eligible to borrow more than with a standard lifetime mortgage.
This extra borrowing capacity can materialise in a few different ways:
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Higher initial release: You may be able to get a larger lump sum upfront.
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Larger drawdown: If the product is drawdown-style, your unused pot may be bigger.
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Lower interest: The interest rate may be more competitive, reducing the overall cost.
However, you’ll still be bound by maximum LTV limits and other lending constraints based on the specific underwriting by your lender.
Alternatives to an enhanced lifetime mortgage
If an enhanced lifetime mortgage isn’t suitable or available, there are several other options you could explore:
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Standard lifetime mortgage: The most common equity release option without health-based enhancements.
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Drawdown lifetime mortgage: Allows you to release equity in stages rather than all upfront, which can slow down the interest accrual.
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Home reversion plan: This involves selling a portion of your home to a company in return for cash while you continue to live there.
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Secured loan or second charge mortgage: Means borrowing against your home equity while keeping the mortgage in place, but it requires passing affordability checks because it involves regular payments.
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Remortgaging or downsizing: You might want to consider remortgaging or selling and moving to a smaller property to free up equity.
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Retirement interest-only (RIO) mortgages: These mean keeping the property while borrowing on an interest-only basis, but an RIO mortgage can be more difficult to qualify for due to the payments.
These alternatives may come with different risks, costs, and eligibility criteria. So, it’s always worthwhile reviewing your options in detail with a qualified expert advisor.
Why choose Money Helpdesk for your equity release?
Using an enhanced lifetime mortgage can be an excellent way to free up funds tied up in your home. However, these products can’t be reversed, so it’s extremely important to ensure you’ve thoroughly reviewed all your options and found the best deal possible.
Our advisors specialise in finding the most suitable equity release solutions for individual goals. Because they have access to specialist lenders and exclusive providers, they can help you secure better terms and avoid unnecessary rejections or delays.
Here are some of the reasons people across the UK trust us to help them arrange their equity release:
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We specialise in enhanced lifetime mortgage products
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Our brokers are 5-star rated on leading review platforms
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Your first chat is free, with no obligation to proceed
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Access to specialist equity release lenders with exclusive rates
If you’d like to compare equity release rates or speak to one of our experienced advisors for a free, no-obligation chat, you can get started here.
FAQs
A standard lifetime mortgage bases borrowing and rates on your age, property, and level of equity. An enhanced version gives you better terms (higher cash release, lower rate, etc.) if you qualify due to health or lifestyle factors.