What does Martin Lewis say about Lifetime Mortgages?(Top Tips For 2024)

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What does Martin Lewis think about Lifetime Mortgages?

martin lewis and lifetime mortgages compass pointing to expert

Lifetime mortgages, as explained by money-saving expert Martin Lewis, are a type of equity release scheme allowing homeowners to borrow against the value of their property.

These mortgages are designed for homeowners aged 55 and above, offering a tax-free lump sum or regular income with interest added, which is repaid from the sale of the property after the owner’s death.

Martin Lewis provides essential guidance on choosing the right lifetime mortgage with a qualified adviser, ensuring people make informed and beneficial financial decisions in their later life.

Martin Lewis explains when looking for a solution, you should always try secure the most competitive interest rate, which is something Later Life Finance can guarantee. He recommends anyone with an existing lifetime mortgage should check if they are eligible for a more competitive interest rate, and how much equity can you can release. 

The money saving expert says if you are looking at using a lifetime mortgage calculator, ensure you work with an independent company who is registered with the equity release council. Later Life Finance are independent experts and members of the equity release council. 

To compare the top 10 equity release companies, we have reviewed and listed the best providers to help you compare your options, including lender features, such as downsizing protection, voluntary repayments and more. 

Martin Lewis Lifetime Mortgages: What’s his opinion?

Martin Lewis, a well-known financial expert in the UK, has provided valuable information on his opinion about lifetime mortgages. 

A lifetime mortgage is a type of equity release scheme that allows homeowners over 55 age to borrow money against the value of their property, without the need to sell or move out. 

Martin Lewis has shared advice and guidance on lifetime mortgages, addressing important aspects such as interest rates, eligibility criteria, and potential risks.

If you are considering a lifetime mortgage, it is highly recommended to take Martin Lewis’s advice into account. 

He emphasises the importance of careful consideration and seeking specialist advice, as these mortgages are not suitable for everyone. Martin Lewis offers valuable information to help homeowners make informed decisions and understand the potential implications of opting for a lifetime mortgage. 

He advises you navigate the complex world of later life mortgages using the expertise of a qualified equity release adviser. 

Later Life Finance are a specialist broker with access to the entire equity release marketplace. Get in touch for a no obligation chat on 0800 2465228 to discuss your options and to find out how much you can borrow on a lifetime mortgage. 

Does martin lewis think lifetime mortgages are safe?

The Money Saving Expert Martin Lewis explains an equity release lifetime mortgage lets you access the money tied up in your home, with optional repayments allowed to pay funds back and avoid the interest compounding.

By making repayments to the mortgage this can help reduce the interest effect, depending on the amounts you pay during your lifetime.

If you choose to make no repayments the money you owe plus interest continues to accumulate is only repaid from the sale of your property once it is sold.

There will be less equity remaining for your beneficiaries due to the equity plus the compound interest accrued.

If you choose to make repayments, this will help reduce the effect of the interest on the equity borrowed. Most plans allow interest payments to be made to help reduce the interest accruing.

Accessing equity release lenders from the whole market will provide you with the best range of options for your requirements. 

Alternatives To Equity Release

Martin Lewis advises to consider alternatives such as downsizing before taking equity release.

Moving home and downsizing can help you free up equity if you are able to move to a lower value property. This may provide a practical solution for your overall requirements.

If you do not feel downsizing is practical for health or other reasons, Martin Lewis thinks a lifetime mortgage is an option to consider, if you seek expert advice on all your options, including any other alternatives, such as entitlement to means tested benefits and taking a lodger to provide extra income, for example.

Later Life Finance review all the alternative options before discussing the most suitable equity release company based on your requirements. 

 Martin Lewis’ Lifetime Mortgage Top Tips

later life couple on bikes discussing equity release lifetime mortgages
 The Money Saving Expert provides four useful tips to consider when releasing equity from your home

Don’t release more money than you need initially

 A form of lifetime mortgage known as a Drawdown plan is a popular way of raising funds.

This method allows you to take a smaller initial lump sum with access to an additional borrowing facility in the future.

Since you are only charged interest on the money taken, the plans provide an economical way of accessing money.

For example, you could take an initial lump sum of £10,000 (the minimum amount) with an additional reserve facility which can be drawn upon in smaller lump sums (minimum reserve drawdowns is £500-£2,000, depending on the lender).

With this arrangement, you are only charged interest on the money drawn, which means it’s cheaper than taking the money in a larger lump sum at the beginning.

Access our equity release calculator to see how much money you can raise from your home

Work with Equity Release Council registered members

All reputable equity release companies are members of the equity release council and regulated by the Financial Conduct Authority, the industry regulator and watchdog.

Equity Release Council membership verifies the firm you are dealing is reputable and adheres to the principles set out by the council.

What are the codes of conduct the Equity release council require to be followed? 

For lifetime mortgages the rate must be fixed for each release or, if variable, the rate must be capped for the life of the loan. (Most plans offer lifetime-fixed interest rates)

  • You must have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract.
  • You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan.
  • The product must have a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.
  • All customers taking out new plans which meet the Equity Release Council standards must have the right to make penalty free payments, subject to lending criteria.
  • Later Life Finance are members of the Equity Release Council. 


 Expert Equity Release Advice

Access to a qualified, Equity Release Council registered equity release adviser will ensure you receive independent, expert advice. 

Advice can be provided by telephone, video call, or in person.

  • Dealing with an adviser with access to the whole equity release market will also enable you to access all companies and schemes available, which will help match your requirements with the most appropriate solution available and the best provider and plan for your needs, on an impartial basis

Discuss the impact on means tested benefits with your adviser

Your adviser will discuss any impact on means tested benefits to ensure you are aware of the wider implications of raising cash from your home.

Access our equity release calculator to see how much money you can raise from your home

Equity release FAQs

The main downside to equity release is the effect of compound interest on the most common type-the lifetime mortgage. However, this interest effect can be avoided or reduced with voluntary repayments. The equity release council included voluntary repayments as a requirement for lenders to meet their strict codes of conduct. The ability to make voluntary, penalty-free partial repayments was made a compulsory feature for all products to meet Equity Release Council standards from March 2022.
Prior to finalising your decision on equity release, it is crucial to seek financial guidance with a qualified equity release adviser. Discussing your plans with an independent equity release adviser will enable you to compare the whole market, and your adviser will identify the most suitable solution to match your specific circumstances. Additionally, should you opt to proceed with equity release, it is essential to obtain legal advice. Your adviser will be able to suggest an independent solicitor who specialises in equity release.
While Martin Lewis does not provide a direct endorsement for equity release, he acknowledges that under specific circumstances, it can be a viable solution to access funds tied up in your home to meet living costs and provide financial security. Where downsizing has been ruled out, for example, Martin Lewis has a balanced view on the concept of equity release and it's benefits to homeowners seeking extra funds in later life, and advises independent advice on equity release is obtained.
Equity release provides you with a cash lump sum or a drawdown facility to take the cash over a longer timeframe. The "catch" with equity release is that the money released from your home, plus interest will need to be repaid when the property is eventually sold. With a Lifetime Mortgage, you will owe the money borrowed plus the loan interest accrued. If you make voluntary repayments to the mortgage this will help reduce the amount of interest repayable on the mortgage, and will help maximise any inheritance your beneficiaries may receive.
It takes between six and eight weeks for an equity release application to complete and to receive your funds. The timescale depends on whether you have a mortgage to repay from the money taken, and whether there are any legal processes which may delay the process, such as moving home or changing the title.
A lasting power of attorney, or LPA is not required to setup an equity release plan. However, having an LPA in place is important to ensure access to further funds from a drawdown plan if you ever lose capacity to make your own decisions, or cannot sign your wishes for physical reasons, such as a stroke. If you have not set up an LPA and it is required, the Court will need to appoint a deputy for you. Planning ahead is prudent to ensure you have arranged such measures in case an LPA is required in the future, and this can save a great deal of stress if and when the time comes to use the LPA.
Equity release funds are tax-free and can be used for anything you wish (providing any existing mortgage is repaid from the funds). Popular uses of equity release funds include repaying mortgages and unsecured debt, home improvements, a cash boost, purchasing second homes, and helping family with a financial gift.
Lifetime mortgages are the most popular form of equity release and provide the flexibility to move home and make voluntary payments, if preferable. Equity release customers unlocked £1.6 billion in property wealth in Q2 of 2022. (Equity release council)
An equity release application should take around eight weeks until you receive your equity release funds. This depends on whether you have an existing mortgage to repay and if any changes to the title are required, which can increase the timescale to arrange.
In July 2023 the lowest Equity Release rate is currently 6.03% (Monthly Equivalent Rate) fixed for life. The highest interest rate in the market is currently 8.64% (Monthly Equivalent Rate).

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