Lump sum
You take all the money in one go. It's simple and suits a single, larger need such as clearing a mortgage or paying for building work. You pay interest on the whole amount from the start.
What is a lifetime mortgage?
A lifetime mortgage is a loan secured against your home. You stay the owner and carry on living there as normal. The loan and any interest are usually repaid when the last borrower dies or moves into long-term care, normally by selling the home.
It's the most common type of equity release, and the only type I advise on. If you're 55 or over and own your home, it can be a way to release some of its value without moving. You can read the full process on our page about how equity release works.
Option 1
Ways to take the money
Drawdown
You take a smaller amount first and keep a reserve you can draw on later. Interest is only charged on what you've taken, so it can cost less over time if you don't need everything at once.
Option 2
Ways to handle the interest
Roll-up interest
No monthly payments. The interest is added to the loan, so the amount owed grows fastest with this option, but nothing needs paying each month.
Paying some or all of the interest
Some plans let you pay part or all of the interest each month, which slows or stops the loan growing. The payments are optional on many plans, so check the terms.
Options that may be available
- Inheritance protection: set aside a share of your home's value for your family. It reduces how much you can borrow.
- Enhanced terms: some lenders offer more if you have certain health or lifestyle conditions.
- Fixed or capped rates: Equity Release Council standards require your rate to be fixed or capped for life.
Points to bear in mind
- The loan can grow quickly if interest isn't paid.
- It reduces the value of your estate.
- It may affect your entitlement to means-tested benefits.
- Most plans charge if you repay early, so ask about early repayment charges.
- Council members offer a no negative equity guarantee, so you'll never owe more than your home is worth.
Is it right for you? It depends on your age, health, home and what you'd like to leave behind. Sometimes it isn't the right choice. This page is general information, not advice. I can talk through your options and explain what may suit you, alongside the alternatives to consider.
Not sure if it's for you?
That's exactly what the first conversation is for. It's free, with no obligation.