Compare Lifetime Mortgages For Over 70s

Over 70's lifetime mortgage could transform your retirement with financial security. We explain the different options, what's important to consider and the best mortgages available for over 70's.

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Author Paul Murphy -Later Life Finance Ltd

Demand for mortgages for over 70’s is growing each year, along with the diverse range of options available for older borrowers.

Later Life Finance are a specialist mortgage broker for the over 70’s. We are authorised and regulated by the financial conduct authority (FCA).

As experts in mortgages for over 70s, we review the important points to consider when exploring mortgages for older borrowers and the best UK equity release providers.

Access our free equity release cost calculator for more figures.

We review and compare to ensure you find the best deal for you.

What are the best mortgages for the over 70's?

Over 70s’ mortgages include various types of later life mortgages as an increasingly popular option for older borrowers in need of a remortgage or to release equity to boost retirement finances.

But what are the best mortgages for over 70’s, and why?

The answer to this question depends on your personal requirements and needs in the years to come. The level of choice for older borrowers is greater than ever with funding models becoming ever more sophisticated.

This is due to to the level of demand for remortgages and borrowing in our golden years steadily increasing as baby boomers are realising the home is also a financial asset, and pension pots may have underperformed, or be absent entirely in the years we want to relax and enjoy whilst our health affords us the freedom to.

These mortgages offer a way to access funds tied up in property without the burden of monthly repayments, although payments can still be made on a voluntary basis with flexible lifetime mortgage for the over 60s.

But before diving in, it’s crucial to understand how over 70’s mortgages work, the best interest rates, and how the plans can be arranged to suit your individual requirements for longer term flexibility and security in your home for the years to come.

When you’re ready to compare your key options our later life finance calculator provides instant results.

Over 70's mortgage options

Retirement (RIO) Mortgages

RIO mortgages require regular monthly interest payments and subject to income lenders will potentially lend up to 60% of the value of your home.

Lifetime Mortgages for over 70s

Lifetime mortgages do not require fixed monthly payments although they are allowed on a voluntary basis. Lump sum and drawdown plans are available. Drawdown plans allow cash to be taken as required in small amounts to help reduce the interest costs.

Later Life Finance will help you understand which is the best equity release provider for your needs, and the full range of companies available for over 70s mortgages when comparing all your options.

Interest Only Lifetime Mortgages

Interest-only lifetime mortgages require monthly interest payments, keeping the loan balance constant.

This type of mortgage can help homeowners protect a larger portion of their property for inheritance or maintain a steady loan balance.

The advantage of an interest only lifetime mortgage is the payments are voluntary and can be rolled up, which protects homeowners from defaulting on the mortgage in the event payments were stopped for any reason.

This can be beneficial in the event of either spouse passing away or going into long term care, and protects the surviving homeowner.

Consider whether making monthly interest payments aligns with your financial goals and capabilities.

As a broker, our advice process involves comparing the best companies for equity release and sourcing the top deals from the whole market.

With several new interest only lifetime mortgages being launched in 2024, these plan require fixed monthly payments over a pre-agreed term.

Once the term ends the interest can be rolled up, providing greater flexibility for homeowners in later life.

Understanding the over 70’s mortgage options is key before taking the plunge, we assess your needs and compare rates from different providers. Our experts can help you with this.
Our compound interest calculator service providers detailed projections of the effects of interest and the advantages of making fixed repayments

Taking out an over 70’s lifetime mortgage can have an impact on both inheritance and benefits, so research carefully before proceeding.
Seek professional advice on equity release for finding the best over 70’s lifetime mortgage that suits your needs in 2024!

What are the best interest only mortgages for over 70s?

Deciding which the best interest only mortgage for the over 70s is is dependent on several factors.

How long you may require the mortgage for, whether you plan to move home and settle the mortgage early, for example, as prime considerations.

Lending criteria for over 70's mortgages

What specific criteria are these lenders actually considering when you apply for an over 70’s mortgage?

Lets find out:

Age: Generally, the older you are, the more you can borrow. Lenders use actuarial calculations to estimate your life expectancy, and as a result, they offer larger release amounts to older borrowers.
Property Value and type: The value of your property is a significant factor; the higher the value of your home, the more you can borrow. However, lenders usually cap the maximum percentage of the property’s value that they will lend. This is to ensure there is sufficient equity remaining in the property to cover any interest that accrues over time. Houses and flats have different rules, with houses generally having a higher loan to value than flats.
Loan-to-Value (LTV) Ratio: Lenders use the loan-to-value ratio to determine the percentage of your property’s value that they are willing to lend. The LTV ratio varies between providers, but it typically ranges from around 20% to 50%. Some lenders may offer higher LTV ratios for older borrowers.
Health and Lifestyle: Some lifetime mortgage providers offer enhanced borrowing options for individuals with certain health conditions or lifestyle factors. These factors may affect your life expectancy and can influence the loan amount.
Interest Rates: The interest rate applied to your lifetime mortgage will affect how much you will repay. Higher interest rates usually result in larger loan amounts.
Inheritance Protection: If you choose to protect a portion of your property’s value as an inheritance for your beneficiaries, the amount you can borrow will be reduced, to ring fence the percentage you wish to protect.
Income: Interest only lifetime mortgages and RIO (Retirement interest only mortgages) are based on income and affordability in retirement.
Provider’s Criteria: Each lender has its own underwriting criteria and eligibility requirements. Different lenders have varying loan amounts and criteria.

It’s important to note that with a lifetime mortgage, the loan amount, along with the accumulated interest, is repaid when you pass away or move into long-term care.

Therefore, before considering a lifetime mortgage, it’s crucial to seek independent equity release advice and carefully consider the impact on your estate and inheritance for your beneficiaries.

Additionally, consider alternative options like downsizing or other forms of equity release to determine the best solution for your financial needs.

Over 70's mortgage providers

In 2024, top lifetime mortgage providers offer lifetime mortgages with competitive rates, flexible terms, and exceptional customer service for enhanced lifetime mortgages.

Let’s take a closer look at some of the best providers in the market.

Legal & General Mortgages for over 70's

Legal & General are known for their exceptional customer service and as they funds their own mortgages, they make fast decisions and are flexible. Applications can only be made through independent financial advisers, ensuring that borrowers receive personalised guidance from qualified professionals.

This ensures that customers receive the best advice and guidance when making decisions about their retirement plans. Legal & General also offer a wide range of later life mortgages making it an attractive option for finding the best solution for your needs.

Legal & General are a member of the Equity Release Council. To explore your options further, consider using a free equity release calculator.

Aviva Lifetime Mortgages for over 70's

Legal & General are a member of the Equity Release Council. To explore your options further, consider using a free equity release calculator.

More to Life Lifetime Mortgages for over 70's

More 2 Life offers flexible lifetime mortgage plans from several funders providing borrowers with access to a wide range of solutions available through your equity release adviser.

it’s worth noting that More 2 Life is a member of the Equity Release Council. To explore your options further, consider using our free equity release calculator.

Canada Life Lifetime Mortgages for over 70's

Canada Life offers flexible lifetime mortgage plans and also provide downsizing protection, allowing borrowers to switch to a smaller property and pay off their lifetime mortgage without extra fees.

This means that borrowers can move to a smaller property without having to pay additional fees or charges. This is a great benefit for those who may need to downsize in the future, and

Standard Life Lifetime Mortgages for over 70's

Standard Life offer some of the most competitive lifetime mortgages in the market. With tapered early repayment charges their plans offer a good level of flexibility for homeowners.

Livemore Mortgages for over 70's

Livemore offer 2 and 5 year fixed rate mortgages for over 55’s and homeowners over 70.

They provide interest only mortgages and equity release plans with a wide range of interest rate options to choose from.

Livemore offer a great level of flexibility with their underwriting criteria for older homeowners looking for mortgages in retirement.

Summary

There are many factors to discuss when considering whether an over 70’s lifetime mortgage is suitable for your plans.

Various aspects of equity release, including the option to transfer a lifetime mortgage to a new property, the protection against negative equity, considerations for early repayment, and the choice between a lump sum or drawdown lifetime mortgage are all important factors to consider when exploring equity release.

Later Life Finance provide a comprehensive review of all your equity release options. Our expert advisers provide detailed illustrations and projections to assist you with understanding the effect of raising money from your home on your estate.

We provide professional insight into how to manage the optional interest payments, and how this will affect your estate in comparison with making no payments.

Lifetime mortgages allow homeowners over 55 to borrow against their property. With optional repayments the mortgage is settled when the homeowners pass away or go into long term care.

Voluntary repayments mean compound interest can be avoided or reduced to help preserve more equity for your beneficiaries, or for downsizing and settling the mortgage and buying another home.
No negative equity guarantee for Equity Release Council members ensures you will never owe more than your home’s sale proceeds; protecting you and your family.
Possible to port (move) the lifetime mortgage when moving to a suitable property, or sell property and repay debt with sale proceeds (subject to exit fee’s)
Downsizing protection to repay without any exit fees if you move home and settle early
Access professional equity release advice with Later Life Finance. We help you determine if a lifetime mortgage suits your needs and review lump sum or drawdown options, voluntary repayments and exit fees when considering over 70’s mortgages.

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.