How Much Can I Borrow on a Lifetime Mortgage in 2024? (+ Free Calculator)

The maximum percentage of lending on a lifetime mortgage has changed significantly in 2024 due to the launch of a new interest only lifetime mortgage.

Compare Lifetime Mortgages With Our Experts!

£

Updated June 2024 -Author Paul Murphy 

Later Life Finance Limited. 

Table of Contents

Table of Contents

Speak to our experts on

0800 2465228

Or email:

advice@later-life-finance.co.uk

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. 

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

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

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

The old adage fail to plan, plan to fail is especially relevant when dealing with financial services, and lifetime mortgages. 

Dealing with genuine experts will help avoid pitfalls later down the line. 

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. 

The old adage fail to plan, plan to fail is especially relevant when dealing with financial services, and lifetime mortgages.

Dealing with genuine experts will help avoid pitfalls later down the line.

What's the lifetime mortgage maximum percentage available?

The maximum percentage of lending on a lifetime mortgage has changed significantly in 2024 due to the launch of a new interest only lifetime mortgage. 

From the minimum qualifying age 50, you could release around 55%, subject to your income. 

For voluntary repayment lifetime mortgages (which make up the majority of the market), income is not taken into consideration. 

From age 55 you could release around 22%, and this increases each year by 1% up to around 55% at age 90.

For example, a 60 year old could release around 37%, a 70 year old could release around 40%, and an 80 year old could release around 50%.

The best equity release mortgages for your needs depends on your current and longer term goals, such as early repayment if downsizing, for example. 

Our later life finance calculator provides the key figures to get started with, and we also provide a free review of all your options to compare the whole equity release market. 

What are the typical percentages available with equity release?

the older you are the higher the equity release percentage is infographic

Lifetime mortgage calculator: How much equity can you borrow on a lifetime mortgage?

How much you can borrow on a lifetime mortgage depends on various factors, such as property type and health. 

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. 

How much equity can i release from my home, and what can you borrow the cash for?

Help family with a gift

Gifting an inheritance and IH tax planning

Dream Holiday

Equity release can help you fulfil a dream holiday destination

Speak to our experts on

0800 2465228

Cash Lump Sum

Retirement planning with a lump sum or drawdown facility

Pay Off your Mortgage

Repaying your mortgage to enjoy the retirement you've worked for
  • 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). 

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 does a lifetime mortgage work?

What is a lifetime mortgage and how does it work?

By allowing 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 5 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 in 2023

top reasons for equity release companies & percentages infographic

How do you calculate a lifetime mortgage?

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...

£

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

Is there a credit check for a lifetime mortgage?

As part of the application process for a lifetime mortgage, the lender may check your credit report.

Since lifetime mortgages do not have mandatory repayments, any missed payments on credit are not necessarily an issue for lending. 

If you have any defaults or CCJ’s on your credit agreements, the lender may require these to be settled

Any secured lending must be settled as part of the agreement as a lifetime mortgage is the first legal charge on the property. 

Book a free, no obligation discovery call with our expert advisers

Can I get a lifetime mortgage?

How do you qualify for a lifetime mortgage? Lets look at the criteria:

  1. Age: A common question is what is a lifetime mortgage for the over 60s. Most lifetime mortgage providers require borrowers to be aged 55 as a minimum. 

  2. Property Ownership: You must own a property, which will serve as the security for the lifetime mortgage company

  3. Property Value: The value of your property and the age of the younger homeowner will be a key factor in determining how much you can borrow. 

  4. Property Type: Different lenders have varying criteria regarding the types of properties they accept, standard construction residential houses or flats are acceptable. 

  5. Outstanding Mortgage: If you have an existing mortgage on the property, you need to repay it. You can use the funds from the lifetime mortgage to clear the existing mortgage on completion.

  6. Health and Lifestyle: Some lenders offer enhanced lifetime mortgages for individuals with certain health conditions or lifestyle factors that may impact life expectancy.

  7. Independent Financial Advice: It is essential to seek advice from an independent financial advisor who specialises in equity release and lifetime mortgages. Later Life Finance assess your specific circumstances and guide you on whether a lifetime mortgage is a suitable option for your needs.

What are the pitfalls of a lifetime mortgage?

What are the pitfalls of a lifetime mortgage to consider?

  1. 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
  2. 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
  3. 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. 
how much equity can i release from my home

What factors impact how much I can release?

Not only age and property value are taken into consideration with lifetime mortgage borrowing percentages, other options, such as medically enhanced plans are also available.

These factors include

Your health

if you have any underlying medical conditions and are a smoker, you may qualify for a higher loan to value with medically enhanced equity release plans.

This means you may qualify for a higher percentage due to the reduced life expectancy criteria if you release equity. The more serious the medical condition is, the higher the level of borrowing available to you.

Lifetime mortgage lenders offering medically enhanced plans may offer someone with serious health issues an additional percentage of lending based on their health conditions.

The location of your home

Some lifetime mortgage lenders may offer a higher loan to value on freehold houses rather than leasehold flats, and the property must be of standard construction.

We arrange equity release plans throughout the United Kingdom.

Homeowners in England and Wales have access to all equity release plans available.

If you live in Scotland, there may be a reduction in the range of plans available to you.

There are currently only two lenders who lend on properties in Northern Ireland.

The construction of your home

Your home provides the lifetime mortgage lender with the security for the equity release mortgage to be loaned against it.

The sale proceeds of the property will be the vehicle used to repay the loan in the future, therefore the lender is concerned with the property being safe security for the lending,

The valuation at application stage is carried out to verify the construction type and whether there are any underlying issues such as structural movement.

The construction of your property must be ‘standard construction’ such as brick or poured concrete with a tiled, pitched roof.

Period timber frame properties are considered, along with thatched roof properties and grade 2 listed properties. If you are unsure and need advice, please get in touch for further assistance.

The condition of your home

This is important to the lender as they want to be certain your property will sell to repay the equity plus interest when the plan is repaid at the end of your lifetime. 

The lender instructs a valuation at the outset, and part of the surveyors checks are to ensure the property is in good condition and repair.  

Joint or single application

Some lenders may offer slightly less for joint applications however if you do have a spouse or partner living at the property, a joint scheme would be logical for long term security in your home, as the equity is only due repayable when the last owner has passed away or gone into long term care.

Lender fees

 Most lenders provide a free survey meaning you will not be required to pay a valuation fee in most cases with a lifetime mortgage, unless you are applying for a further advance (which is when you are borrowing on an existing mortgage).

With some equity release lifetime mortgage plans an arrangement fee may apply with the lender. This may be applied with the option to secure a more competitive interest rate.

You are not required to pay the arrangement fee up-front. Most lenders allow you to either deduct the arrangement fee from the loan amount or add it, however if you add this you will be charged interest, therefore it is sensible to deduct the fee to avoid additional interest costs.

Equity Release plans with cash back

Some equity release plans may offer a cash-back. The cash does not attract any interest as it is not added to the mortgage.

Certain lenders offer you a fixed sum regardless of your release amount, and some lenders provide you with a percentage of the amount released. For example, 2% or even 5% extra.

Our calculator provides an estimated lender percentage. Complete for a guide and we will discuss your individual circumstances, priorities and longer term objectives to understand your requirements.

Joint or single applications

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.

Circumstances where a single basis lifetime mortgages may be required for a married couple:

  • Where the spouse’s primary residence is a different property;

  • Where the youngest applicant is below the age of 55 (the minimum age for equity release plans);

  • When one spouse is older, and you wish to apply in one name to obtain more money or a lower interest rate, however for the purposes of long term security this option is not preferable. (On sole application basis anyone else residing in the property would need to vacate it in order for the equity release to be repaid when it is due for settlement).

Lifetime mortgage schemes and options

The range of options has diversified over the recent years with lenders offering more flexible plans.

Downsizing Protection

Your future plans may change, any plan features need to match your requirements for flexibility. 

For a homeowner couple, for example, one of you may wish to downsize if one of you passed away, or whilst you are both still able to do so. 

Certain lenders provide ‘downsizing protection’ for this level of flexibility, which avoids an early repayment charge being applied.

Lodgers

All equity release lenders allow other people living with you. 

If you have a tenancy agreement in place this may limit the number of plans available to you. 

Some lenders insist on a waiver of occupancy form being signed to waive any legal rights and protect your interests, and theirs.

Making Voluntary Payments

Most lenders now allow you to pay voluntary payments.

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.

There are various plan features to explore which can be discussed to help you decide which solution is your ‘best fit’. The benefit of having such a wide range of plans available provides you with flexibility for the future.

The type of property. House, flat or bungalow?

Some lifetime mortgage lenders may offer a higher loan to value on freehold houses rather than leasehold flats, and the property must be of standard construction.

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

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.
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.
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.
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.
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. 
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.
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.
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.
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.
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.
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.
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.
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.