How Much Can I Borrow on a Lifetime Mortgage? (+ Free Calculator)

How much can you borrow with a lifetime mortgage?

With a lifetime mortgage, the amount you can borrow is typically a percentage of your home's value, generally ranging from around 29.6% to 58.4%. This percentage varies based on your age and the specific terms offered by the lender.

Author Paul Murphy

Later Life Finance Limited.

How much can I borrow with a lifetime mortgage?

If you’re considering releasing some of the equity in your home, knowing how much money you can borrow with a lifetime mortgage broker is one important factor, but understanding the most cost effective way to arrange the plan is equally important.

Our experts at Later Life Finance will calculate how much you can borrow on a lifetime mortgage with voluntary interest payments included.

For example, if you can budget a monthly payment of £100, we will provide detailed graphs and projections showing the effect of compound interest and the benefits of making your chosen payments.

How Much Can You Borrow On a Lifetime Mortgage?

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With a lifetime mortgage, the amount you can borrow is typically a percentage of your home's value, generally ranging from around 29.6% to 58.4%. This percentage varies based on your age and the specific terms offered by the lender.

Lifetime mortgage calculator: How to calculate the best deals

Our lifetime mortgage calculator is a great way to get started with calculating the percentages of equity available. We have access to exclusive interest-only lifetime mortgage deals and discounted interest rates to save you money.

A drawdown lifetime mortgage can provide a much more economical method of accessing equity than a lump sum plan.

The growing range of equity release interest only lifetime mortgages are proving popular with homeowners seeking to retain control of their equity. Making regular payments enables you to avoid compound interest and preserve more wealth in your home for the future.

Arranging voluntary repayments based on your preferred budget can not only transform your finances, it can help preserve more equity for the future.

Lifetime mortgage maximum calculator

Get started with our maximum lifetime mortgage calculator to provide an idea of your borrowing options, and book a free review with your expert adviser to compare the top deals available in the market.

We compare the top lifetime mortgage percentage options available and will calculate the best deal for you based on your requirements.

How to calculate the maximum equity release options

The maximum equity release available is based on the age of the youngest applicant. Some lenders offer lower percentages for joint applications compared to single applications.

However a married couple would in most circumstances be better to apply on a joint basis. This is because the plan is only due repayable on last death, or going into long term care.

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An example projection of interest costs with selected monthly repayments included

Interest only lifetime mortgage calculator

Arranging voluntary repayments based on your preferred budget can not only transform your finances, it can help preserve more equity for the future.

Our interest only lifetime mortgage calculator will help you understand the benefits of making regular repayments to your mortgage.

Arranging a lifetime mortgage is a big step, which takes careful research and planning to ensure the selected route is suitable both in the current the longer-term when calculating how much equity you can release from your home.

Later Life Finance have access to the full range of lifetime mortgage providers to establish how much you can borrow and the best solution for your requirements.

Dealing with genuine experts will help avoid pitfalls later down the line. We are often asked how long does equity release take to arrange.

This is around 6-8 weeks, but the company you choose to arrange your plan can also make a big difference to the overall experience and the timescales to arrange.

Fully understanding the pros and cons of each option in order to make a balanced decision is one of the most important parts of the process when considering who the best equity release provider is for your requirements.

What Is the highest LTV equity release?

Equity Release LTV Ratio

LTV Definition: The Loan-to-Value (LTV) ratio in equity release is the percentage of your property’s value you can borrow.
Typical Range: Most equity release customers can borrow between 20-60% of their home’s value through a lifetime mortgage.
Factors affecting LTV: Age, property value, lender criteria, health and lifestyle

Is Equity Release Capped?

The maximum Loan-to-Value (LTV) percentage for a lifetime mortgage in the UK is typically capped at around 58.4%, although this can vary between providers.

What are the typical percentages available with equity release?

Equity release percentage by age

The percentage of equity a homeowner can release typically increases with age. While specific figures vary between lenders, here’s a general guide:

55 years old:	Around 20-25% of the property’s value can be released
65 years old:	About 30-35% of the property’s value
75 years old:	40% or more of the property’s value
85+ years old:	Up to 55% of the property’s value

Our lifetime mortgage calculator is free and provides instant results. As experts in Later Life Mortgages and equity release, later life finance are well positioned to answer this and all your other questions.

You may be wondering if lifetime mortgages are a good idea and if they are suitable for your needs.

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.

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Lifetime mortgages allow homeowners over 55 to borrow against your home with the option to make voluntary repayments to preserve more of your equity. (Payments are optional).

No income or affordability checks to qualify, and takes around 8 weeks to arrange a lifetime mortgage. We have access to the best UK equity release companies to help the process run smoothly with expertise and service.
The money is repaid at the end of your lifetime from the sale of your home.
To check your eligibility and how much equity you can release, try our free equity release calculator
Borrow between 20% and 50% of your home’s value, depending on age; enhanced mortgages available for those health problems.
Negative equity guarantee for Equity Release Council members, which ensures you and your estate are fully protected. Martin Lewis mentions this when recommending how to safely choose a lifetime mortgage provider.
Possible to move home and take the lifetime mortgage if moving to a suitable property
Drawdown plans available to stage the borrowing over the coming years, providing more flexibility
Get professional advice to understand if a lifetime mortgage is suitable.

What percentage can you borrow on equity release?

The percentage of your home’s value you can borrow using a lifetime mortgage is based on the youngest homeowner’s age and is usually between 20% and 55%.

For example, a single homeowner aged 55 could release up to 55%.

Mortgages for older borrowers include lifetime and retirement interest only schemes, and provide a greater range of solutions for older homeowners.

Later Life Finance provide advice on all equity release schemes to help you understand all your options when understanding how much equity you can release from your home.

If you’ve already arranged an equity release plan, you may be considering whether you can borrow more on a lifetime mortgage. Our lifetime mortgage calculator requires no personal details.

It’s possible to arrange additional funds via a drawdown facility or a further advance. If you have used your drawdown facility and need a further advance, contact us for help and we will explore this for you.

Lenders typically assess the value of your property through a professional surveyor appointed by them.

How much can I borrow on a lifetime interest only mortgage?

Typically, you can borrow between 20% and 60% of your property’s value. The exact amount depends on your age, property value, health, lifestyle, property type, and the lender’s criteria (Loan-to-Value or LTV).

What factors affect how much I can borrow with a lifetime interest-only mortgage?

Key factors include: Your age (youngest homeowner), your home’s value, your health and lifestyle, the type of home you own (freehold/leasehold), and the specific lending criteria of the mortgage provider.

How does a lifetime mortgage work?

Lifetime mortgages enable homeowners to borrow a portion of their property’s value, with interest accruing over time and repaid upon death or moving into long-term care.

If no voluntary repayments are made, the compounding interest can grow rapidly, so it’s essential to be aware of the total amount that will need to be repaid in the future.

Using an equity release compound interest calculator lets uk homeowners decide whether a lifetime mortgage is a suitable option to consider.

Later Life Finance provide detailed compound interest projections based on any repayments you plan to make.

Drawdown lifetime mortgages allow you to stage the borrowing over a longer timeframe which reduces the amount of interest charged on the money borrowed.

How long does a lifetime mortgage take to arrange?

A lifetime mortgage application usually takes between 6 and 10 weeks in total.

The process will depend on whether you have an existing mortgage to repay, any title changes and how efficient your solicitor is.

Working with an efficient broker is also important, as they will keep on top of the whole process for you.

Having an experienced expert managing your application will ensure the lending underwriters, solicitors and yourself are kept up to speed.

The most popular reasons for using lifetime mortgages

What is the maximum home equity loan amount?

The maximum home equity amount homeowner can release typically increases with age. Here’s a general guide:

55 years old:	Around 20-25% of the property’s value can be released
65 years old:	About 30-35% of the property’s value
75 years old:	40% or more of the property’s value
85+ years old:	Up to 55% of the property’s value

You may be wondering if lifetime mortgages are a good idea and if they are suitable for your needs.

How to calculate a lifetime mortgage, and what is the maximum loan to value of cash available?

There are a few factors that affect how much equity you could release from your home with a lifetime mortgage.

It’s important to remember each lender has different criteria.

As a guide, the following information is used to calculate how much money you could release.

The factors used to calculate this are:

Your age (or the age of the youngest person if you own the property jointly)
The type of home you own (house/flat)
Your home’s valuation (lenders carry out a valuation)
Your health and lifestyle
Whether you have a leasehold on the property
How you arrange your lifetime mortgage (as one cash lump sum, or a lump sum with a cash reserve facility)
Choosing a lenders inheritance guarantee to leave a set percentage of your home’s value behind

Get your free lifetime mortgage calculation & book your free review...

Do you pay monthly for a lifetime mortgage?

You don’t have to make any regular payments with a lifetime mortgage.

You are entitled to make regular voluntary repayments to maintain control of the interest.

For example, if you want to avoid compound interest accruing, you could pay the interest back each month.

If you choose to do this, there will be no compound interest applied, so long as you continue to make these payments.

Can you be refused a lifetime mortgage?

You could be refused a lifetime mortgage if your home is non standard construction or close to commercial premises.

Eligibility for a lifetime mortgage is not income or affordability based, which means the lender is more interested in your home being suitable security for lending than your income or credit status.

What are the different types of lifetime mortgages?

The two main types of Lifetime Mortgages are lump sum and drawdown.

The loan is secured against your house. You receive a one-time, tax-free, cash payment.

Interest only lifetime mortgages are available which allow interest payments to avoid or reduce compound interest being applied to help preserve more equity in your home.

When must the lifetime mortgage be repaid?

Lifetime Mortgages are designed to last for your lifetime. They are repaid when you (sole application) or, if you’re borrowing jointly, both of you die or move out of your home into long-term care.

You can still move home and port the mortgage with you.

Who offers the best lifetime mortgage?

The best lifetime mortgage depends on your requirements.

You may prioritise flexibility to downsize over interest rates, for example.

Providers offer various features, each of which needs to be fully explored and considered with a qualified adviser.

Here is a list of lifetime mortgage providers:

LV=
Legal and General
LiveMore
More2Life
OneFamily
Pure Retirement
Scottish Widows
Standard Life.
Royal London
Canada Life
Aviva
Just

What are the pitfalls of a lifetime mortgage?

What are the pitfalls of a lifetime mortgage to consider?

A lifetime mortgage (unlike a regular mortgage) charges compound interest. This means If you don’t choose to repay the interest at regular intervals, the sum will compound and grow. This means at around 5 per cent interest, the amount you owe would double every 15 years due to the compound interest
Means tested benefits- It’s crucial to check entitlement to any means tested benefits as these can be affected by having cash raised from a lifetime mortgage
Inheritance-The amount you leave your beneficiaries will be reduced. This depends on whether you make voluntary repayments or not, and whether you take the cash as a large lump sum or drawdown payments.

Summary

Our free equity release calculator provides instant results. In order to provide you with an accurate calculation your age and estimated property value are required.

Any personal details provided are confidential and not shared with third parties.

Our expert equity release advisers will provide detailed interest projections and illustrations for your consideration.

Your adviser will check if an equity release product is suitable and explain how much equity you are eligible for and compare the market to ensure you secure the best solution.

They will also explain how the lifetime mortgage interest may affect the remaining equity in your home and they should recommend you discuss your plans with any family members, if appropriate.

To find out how much equity you can borrow with a lifetime mortgage, request a call back for a detailed illustration.

Lifetime mortgage FAQs

What percentage can I borrow on a lifetime mortgage?

The amount you can release on a lifetime mortgage is usually between 20% and 50% of the home's valuation. This is based on the age of the youngest homeowner and the property type.

Can you borrow more on a lifetime mortgage?

If you need to raise more money and have no remaining Drawdown (reserve) Facility, you may be able to take a Further Advance from your lifetime mortgage. This is additional borrowing on top of your existing lifetime mortgage and is subject to the valuation of your home and the balance on your lifetime mortgage.

Can I move home with a lifetime mortgage?

Equity release companies who adhere to the Equity Release Council codes of conduct offer the option to transfer your lifetime mortgage to a new property if you decide to move. However, certain conditions must be met for the new property to be considered "suitable." A suitable property refers to one that is deemed marketable by the equity release company in the future. For instance, if the new property is located in a flood-prone area, the transfer of the lifetime mortgage may not be permitted. In the case of downsizing to a property of lesser value, you might be required to repay a portion of your lifetime mortgage to facilitate the transfer.

How much do you pay back on a lifetime mortgage?

In the case of a lifetime mortgage, you generally do not need to make monthly repayments since the loan, along with the accumulated interest, is settled when your home is eventually sold. Your lifetime mortgage adviser will provide detailed projections of how much you will pay back based on whether you opt to make payments or not.

What happens when you die shortly after taking out a lifetime mortgage?

In the event of you passing away shortly after obtaining a lifetime mortgage, the interest accrued would not have significantly accumulated, resulting in a smaller growth of the debt. If no other homeowner is listed on the lifetime mortgage, the lender requires the mortgage to be settled within 12 months of you passing away. The executors of your will sell the property and utilise the proceeds to settle the debt. The beneficiaries of your estate may opt pay off the debt using cash or a new mortgage and retain ownership of the property. This will depend on factors including your wishes set out in your will, and on whether the property is to be retained or sold, with any remaining equity divided by your beneficiaries.

Can you end up owing more than your home is worth with a lifetime mortgage?

Equity release lenders who are a member of the Equity Release Council provide a no-negative equity guarantee. This ensures you will never be required to repay more than the proceeds from the sale of your home to settle the debt. In other words, the lender cannot pursue you for any shortfall between the debt amount and the sale proceeds. This protection is made possible by the no negative equity guarantee, which is upheld by all members of the Equity Release Council. According to this guarantee, the lender is strictly limited to requesting only 100% of the sale proceeds as repayment. They are not permitted to seek additional payment from you, your estate, or your estate beneficiaries.

What is a typical rate for a lifetime mortgage?

A typical rate for a lifetime mortgage typically falls between 5.9% and 7%. That said, your rate may be different depending on factors like your loan-to-value ratio and the features included in your plan. It’s important to compare the features of different plans to find the one that best fits your needs.

What are the disadvantages of a lifetime mortgage?

Lifetime mortgages come with a few risks, such as the possibility of owing more than the value of your home due to accumulated interest. They also require monthly fees and can significantly reduce the amount of inheritance you can pass on to family members. Ultimately, it’s important to consider all of these factors when deciding if a lifetime mortgage is the right choice for you.

How do lifetime mortgage interest rates work?

Lifetime mortgage interest rates are typically based on your age, the amount of money you need to borrow, and the value of your property. Generally speaking, the older you are and the less you borrow, the lower the rate you can expect. Drawdown lifetime mortgages have interest rates set at the time of further borrowing, whereas the initial lump sum is determined at the time of arranging the plan. So be sure to research what’s out there before making a decision.

Can I pay off a lifetime mortgage early?

Yes, you can pay off a lifetime mortgage early, but there may be fees associated with doing so. Providers have varying levels of early repayment charges which your equity release adviser will discuss with you to ensure you have access to all your options and understand the features and charges. It is best to check with your provider before you decide on the repayment plan.

What are the different types of lifetime mortgage?

Lifetime mortgages come in several forms, including lump sum, drawdown and interest-only plans. Each offers different rates and repayment arrangements, so your adviser can tailor the mortgage to meet your needs. Later Life Finance provides access to the whole lifetime mortgage market. We will explain the features, costs and points to consider of each option. This will help you make a balanced decision on the right solution for you.

Can equity release be used to pay off an interest-only mortgage?

You can repay an interest-only mortgage with an equity release plan. Lifetime mortgages are the most popular form of equity release and allow optional repayments of interest charges, if you wish. Since monthly repayments are voluntary with a lifetime mortgage, your home is not at risk of repossession if you do not maintain monthly payments.Therefore these plans can be more suitable into retirement years.

what is an interest only lifetime mortgage?

An interest-only lifetime mortgage is a type of equity release plan where you can pay the interest off on a monthly basis. This avoids compound interest being added which stops the loan from increasing. This type of mortgage is popular for homeowners who want to maintain equity in the home for inheritance or downsizing purposes.