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Lifetime Mortgage Reviews – What you Should Know First

lifetime mortgages review

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

It’s natural to want to read some lifetime mortgages reviews before getting equity release advice or making an application for this type of credit. We’ve recapped on lifetime mortgages below and provided some genuine lifetime mortgage reviews for you to chew over. Take a read below! 

What is a lifetime mortgage and how does it work?

A lifetime mortgage is a type of equity release plan that allows senior homeowners (over 55) to access some of their home equity as a lump sum or drawdown loan (drawdown lifetime mortgage). This money does not have to be repaid through monthly instalments like typical secured loans. The money is repaid when the homeowner dies or moves into long-term care. 

Once the homeowner no longer lives in their property due to passing away or moving into residential care, they must repay all of their loan plus the lifetime mortgage interest, which will have been accumulating on the debt each month since you took it out. So the longer you have held your lifetime mortgage, the bigger your debt will have grown. 

Because the debt will be a substantial amount, it is repaid through the sale of your property. The lender can force the sale of the home and then recover the debt from the sale proceeds. Any remaining money will be given back to the homeowner or paid into their estate if they have moved into long-term care or passed away, respectively. 

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What is the difference between a lifetime mortgage and equity release?

Many people use the terms lifetime mortgage and equity release interchangeably. This is because there are only two types of equity release loans (not to be confused with releasing equity!) available and the other one – home reversion plan – is much less common. 

But there is a difference between lifetime mortgages and equity release because a lifetime mortgage is just one type of equity release plan. A home reversion plan works in a slightly different way. 

What are the pros and cons of a lifetime mortgage?

The benefits of using a lifetime mortgage are:

  1. Access credit for your retirement with no monthly repayments
  2. Continue to live at home as normal
  3. Only repay after death or moving into long-term care
  4. Spend it on whatever you wish
  5. The lump-sum you receive is tax-free

The major con of equity release is that these loans can become super expensive to repay. You may end up paying x2, x3 or even more your initial loan amount to clear the debt. This means loved ones may not receive the inheritance they otherwise would have. 

Are lifetime mortgages safe?

Lifetime mortgages are safe as long as you get lifetime mortgage advice first and only consider lenders that are authorised and regulated by the Financial Conduct Authority, which is verifiable on the Financial Services Register. 

For additional security and benefits, you may want to only consider equity release providers that are a member of the Equity Release Council. 

The Equity Release Council

Members of the Equity Release Council are any companies working in the equity release sector that want to voluntarily commit to a number of rules and regulations that protect homeowners, which simultaneously enhances their brand and image to attract more clients. 

One of the biggest benefits of using a lender that is a member is they must commit to the negative equity guarantee. The negative equity guarantee states that lenders cannot chase debts that have not been repaid after the property sale, which would happen if the property sale price is less than the total debt owed. 

Can I pay off a lifetime mortgage?

You can pay off a lifetime mortgage debt in full but you will be subject to early repayment charges. Often these fees are expensive, but some lenders reduce their early repayment charges progressively the longer you have the loan, with some dropping to as low as 0%. 

You can also make voluntary interest repayments each month with some equity release loans. This will stop the debt from increasing as fast and could even keep it the same in the end as the lump sum you took out. 

Who can provide a lifetime mortgage?

An equity release lifetime mortgage can be provided by a small number of banks, such as Nationwide. But more often than not, you will need to use dedicated equity release companies or some finance businesses that also tend to deal with insurance and investments. Some companies that offer equity release are More 2 Life, LV, Aviva Pure Retirement and OneFamily. 

Read recent lifetime mortgage reviews

Below are some of the recent lifetime mortgages reviews on some of the companies above:

Pure Retirement

“Read your small print We took out some equity 3 years ago and was told if we moved we could carry it over no problem. But there is… We found an amazing new barn conversion but won’t transfer it because it’s near to a farm.”

More 2 Life

“My first contact with more2life and I was pleasantly surprised at the ease with which my inquiry was resolved. Hammad was pleasant, knowledgeable, quick & efficient, it was a delight talking with him and I have no hesitation in awarding him a five-star rating.”

OneFamily

“My impression was that the Adviser understood my fears about engaging in the process around lifetime mortgages She was friendly from the start and easy to speak with.”

Always conduct your own extensive research or use an equity release broker for support. 

Can I trust lifetime mortgages reviews?

Always take any online review with a pinch of salt. Some positive reviews could be paid for by companies acting wrongfully or incentivising the reviewers. These are sometimes easy to spot because they are written in a similar way or repeatedly name company employees. 

Brush up on lifetime mortgages with MoneyNerd!

You can uncover plenty more important details about equity release on our website.

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