This guide was last updated 4 February 2025
A lifetime mortgage can be a great option if you want to use the value of your home to pay for care, all while staying in the comfort of your own house. Here’s a simple, step-by-step guide on how this works:
A lifetime mortgage is a type of equity release scheme that allows you to borrow money against the value of your home. The good news is, you don’t need to make monthly payments. Instead, the loan and the interest are paid back when you pass away or move into long-term care.
Before diving in, you’ll want to make sure you meet some basic requirements:
There are a few costs to keep in mind:
Before making any decisions, it’s a good idea to talk to a financial advisor who specializes in equity release. They can help you:
When picking a provider, think about:
You’ll also need to consult with a solicitor who’s independent of the mortgage provider. They’ll make sure you fully understand the terms and conditions, especially how the loan might affect your estate.
Once you’ve secured your lifetime mortgage, you can use the funds to cover various care-related expenses, including:
You can choose to receive the funds as a lump sum or in smaller, regular payments, depending on what works best for you.
Although you won’t need to make monthly payments, it’s important to stay aware of how the loan balance grows over time. As interest accumulates, the total amount you owe will increase. Periodically review your financial situation to make sure you’re comfortable with the impact on your home’s equity.
A lifetime mortgage can reduce the inheritance you leave behind for your loved ones, as the loan will be repaid from the sale of your home. It’s a good idea to have an open conversation with your family about this so everyone is on the same page.
If you’re not sure a lifetime mortgage is the right fit, there are other ways to pay for care:
As your care needs change over time, you may need to adjust your funding. Stay in touch with care professionals and keep reviewing your options to make sure your needs are met.
A lifetime mortgage can be an excellent way to access the value of your home and fund care while staying in your own space. Just make sure to do your research, consult with financial and legal professionals, and regularly reassess your needs. By taking these steps, you can confidently use this option to ensure that your care needs are taken care of in the long run.