Types of mortgage options for later life lending
Even if you’re over 55, you can still qualify for a standard residential mortgage, provided you meet the lender’s criteria. This typically involves proving a steady income that can cover your mortgage payments until the end of the term. Keep in mind that these mortgages often come with shorter terms, which can lead to higher monthly payments.
A residential mortgage later in life offers flexibility, whether you opt for a capital repayment plan or an interest-only structure—where the principal is repaid at the end of the term. However, if you choose to repay all or a significant portion of the loan early, you may face an early repayment charge.
You can select a fixed interest rate to keep your payments consistent over a set period, or a variable rate, where payments fluctuate with changes in the interest rate. Your mortgage adviser will work closely with you to find the most suitable option for your needs.
Lenders will assess your affordability, so having sufficient equity in your property or a sizable deposit if you’re buying a new home is crucial. This equity or deposit will need to cover the difference between the mortgage amount and the property’s value.
As with any standard residential mortgage, it’s important to understand that failing to keep up with repayments could put your home at risk, potentially leading to repossession.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Coreco charges a fee of up to £695 for later-life mortgage advice.
A Retirement Interest-Only (RIO) mortgage offers a tax-free lump sum, with monthly payments dedicated solely to covering the interest. This product is specifically designed for individuals aged 50 and above, providing a valuable solution for older borrowers who might find it challenging to secure a standard residential mortgage.
The capital amount, or the original sum borrowed, is only due for repayment when the last homeowner passes away or enters long-term care, typically through the sale of the property.
This type of mortgage is versatile, whether you’re looking to pay off an existing mortgage, fund home improvements, or support your family financially.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Coreco charges a fee of up to £695 for later-life mortgage advice.
A Lifetime Mortgage is a type of equity release product designed to help homeowners aged 55 and over unlock the value in their property without the need to sell or move. It allows you to release a tax-free lump sum or take smaller, regular amounts, all while continuing to live in your home.
With a Lifetime Mortgage, you borrow a portion of your home’s value, with the loan secured against your property. Unlike traditional mortgages, there are no monthly repayments required. Instead, the loan, along with any accrued interest, is repaid when you pass away or move into long-term care, typically from the sale of the property.
A Lifetime Mortgage is a long-term commitment and is best suited for those looking to enhance their financial flexibility in later life without the burden of monthly repayments. Your mortgage adviser will help you understand all the options, ensuring you make an informed decision that aligns with your financial goals and lifestyle needs.
You should always think carefully before securing a loan against your property.
A lifetime mortgage will reduce the value of your estate and may affect your entitlement to means-tested benefits.
Clearing an existing mortgage with a lifetime mortgage may result in a higher cost of borrowing.
Mythbusters
When it comes to lifetime mortgages, there are several misconceptions that can cause unnecessary concern or confusion. Let’s debunk some of the most common myths and set the record straight.
Myth 1: You Will Lose Ownership of Your Home
Busted: With a lifetime mortgage, you retain full ownership of your home. The loan is secured against your property, but you continue to live there as long as you wish.
Myth 2: You Can't Leave an Inheritance
Busted: Many lifetime mortgage plans offer an inheritance protection option, allowing you to ring-fence a portion of your home’s value to leave to your loved ones. Additionally, careful financial planning can help you manage how much equity is released.
Most lifetime mortgage providers will allow you to service the interest and make overpayments on your loan if you wish. The amount you can overpay varies from lender to lender.
Myth 3: You can’t move house
Busted: You can move house with a later life mortgage. Most equity release plans and lifetime mortgages are designed to be portable, meaning you can transfer them to a new property as long as it meets your lender’s criteria. So, having a later life mortgage doesn’t mean you’re stuck in your current home forever.
Myth 4: You Could End Up Owing More Than Your Home's Value
Busted: Reputable lifetime mortgage providers, like those we work with at Coreco Lifetime, offer a “no negative equity guarantee.” This means you will never owe more than the value of your home when it is sold, protecting you and your estate from debt.
Myth 5: Lifetime Mortgages Are Only for the Desperate
Busted: Lifetime mortgages can be a strategic financial tool for many homeowners. Whether you want to enhance your retirement lifestyle, fund home improvements, or help family members financially, a lifetime mortgage can provide the flexibility and funds you need.
FAQ’s
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1. What are the later life mortgage options:
- Lifetime mortgages
- Traditional Mortgages
- Retirement Interest Only mortgage
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2. Will I still own my home?
Yes, with all the later life mortgages we offer, you remain 100% ownership of your home. The mortgage is simply secured against your property.
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3. Are there monthly repayments?
No, there are no required monthly repayments. The loan and the accrued interest are typically repaid from the sale of your home when you pass away or move into long-term care. With traditional mortgages and Retirement Interest Only mortgages, you will have contractual payments. With a lifetime mortgage, there are no contractual payments
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4. Can I protect an inheritance for my family
Yes, many lifetime mortgage plans offer inheritance protection options, allowing you to ring-fence a portion of your home’s value to leave to your loved ones.
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5. What happens if the value of my home decreases?
Most lifetime mortgages come with a “no negative equity guarantee.” This means you will never owe more than the value of your home when it is sold.
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6. Can I move house with a lifetime mortgage?
Yes, you can move house, provided the new property meets the lender’s criteria. The lifetime mortgage can be transferred to your new home.
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7. How much can I borrow with a lifetime mortgage?
The amount you can borrow depends on several factors, including your age, the value of your property, and your health. Generally, the older you are, the more you can borrow.
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8. Is the money I release from a lifetime mortgage tax-free?
Yes, the money you release from a lifetime mortgage is tax-free, however, what you do with the money may be taxable.
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9. Will a lifetime mortgage affect my state benefits?
Releasing equity from your home could affect your entitlement to means-tested state benefits. It’s important to consider this and seek advice.
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10. Who can apply for a lifetime mortgage?
Homeowners aged 55 and over can apply for a lifetime mortgage. Your property must meet certain criteria set by the lender.
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11. How is the interest on a lifetime mortgage calculated?
Interest on a lifetime mortgage is usually calculated as a compound interest, which means it is added to the loan amount and compounds over time until the loan is repaid.
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12. What is the process for obtaining a lifetime mortgage?
The process involves an initial consultation, a detailed discussion of your needs and circumstances, an application process, property valuation, and finally, the release of funds once everything is approved.
How Can We Help?
Our team of experienced advisers at Coreco Lifetime are dedicated to guiding you through the lifetime mortgage process with clarity and care. We offer:
- Personalised Advice: Tailored guidance to help you understand the best options based on your individual needs and circumstances.
- Transparent Information: Clear, honest, and jargon-free explanations of the benefits and implications of a lifetime mortgage.
- Comprehensive Support: Assistance from the initial consultation through to the completion of your mortgage, ensuring a smooth and stress-free experience.
Whether you’re looking to supplement your retirement income, consolidate debts and repay your existing mortgage, make home improvements, or assist your family financially, Coreco Lifetime is here to help you achieve your goals with confidence and peace of mind.
Lifetime mortgage guides
Newbie? You’ll feel like an expert in no time with our jargon-busting mortgage guides
Meet Louise
Louise grew up in a quaint village in the Kent countryside, where she lived with her grandparents and her aunt. Much of her childhood was spent riding and caring for her ponies, nurturing her love for animals and the outdoors.
Sharing a passion for judo with her father, they enjoyed many father-daughter moments competing together. Louise’s dedication to the sport led her to become a British judo champion for three consecutive years.
Her love for an active, outdoor lifestyle continues today as she enjoys walking her dog, Bella, with her partner.
Louise has been a valued member of the Coreco family for over five years, bringing more than 15 years of experience as an advisor. With her CEMAP and CERER qualifications, she is exceptionally equipped to guide clients through the mortgage process.
Louise is not just any mortgage advisor—she’s an award-winning professional! She received the Best First-Time Buyer Broker award at the British Mortgage Awards in 2018. Her expertise is evident in her specializations: assisting first-time buyers, and self-employed individuals, and leading the Later Life lending proposition, Coreco Lifetime.
Louise’s passion for helping people is evident in the dedication and care she brings to her work, making her an invaluable asset to our team and to her clients.
The Coreco Couch - Introducing Coreco Lifetime with Louise
Coreco are proud to be a Member of the Equity Release Council. Their website can be found here: https://www.equityreleasecouncil.com/
Important Information
You should always think carefully before securing a loan against your property.
A lifetime mortgage will reduce the value of your estate and may affect your entitlement to means tested benefits.
Clearing existing mortgage with a lifetime mortgage may result in higher cost of borrowing.
We charge a fee for later life mortgage advice. The fee is up to £695.
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Samina Sharmin
Great experience with Coreco
My mortgage process was handled with expert professionalism from start to finish by Coreco. Danielle and David were amazing—providing great advice and reassuring me during a stressful time. I lost count of how many times I emailed them with multiple queries, but they always responded promptly with helpful advice. Over the past three months, they have worked diligently on my remortgage, keeping me informed about any changes, including mortgage rates and early repayment fees. I highly recommend their services and will certainly be in touch again in two years when my mortgage deal expires.
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Robert Statham
Jan and Jenny made the mortgage renewal easy
Jan and Jenny made the mortgage renewal process very easy and kept us updated with the rates way before the actual renewal date. Even got us a better rate even after we secured initially. Highly recommend
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Leslie
Responsive and Knowledgeable
This was my first time buying a property that was not my primary home. I had more questions and change of circumstances along the way. I also was working against some short timeframes. I am grateful that Scott Lambert and Stacey Denham were on top of things. Everything went to plan. I have used Coreco in the past for my primary home and again a positive experience.
If you have more questions or need personalised advice, our team at Coreco Lifetime is here to help you navigate the options and find the best solution for your needs.