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Lifetime Mortgage Reviews: 2024 Top Rated

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Table of Contents

Table of Contents

Author Paul Murphy Later Life Finance Ltd

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If you considering a lifetime mortgage but feeling overwhelmed by the information available, Later Life Finance are here to help you uncover the truth behind lifetime mortgage reviews. 

By understanding how these mortgages work, you can make an informed decision with confidence. 

We have access to the best equity release companies and schemes to source you the correct solution for your needs. 

Let’s get started. 

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Overview

later life couple on bikes discussing equity release lifetime mortgages

  • Lifetime mortgages provide homeowners aged 55 and over with the ability to access equity in their home without selling or making monthly payments, (but still allow payments to preserve equity). 

  • When selecting a provider, factors such as interest rates, fees and plan flexibility are essential for finding the best solution available.

  • Choosing an Equity Release Council member provides a negative equity guarantee. 

  • You should consider discussing your plans with family members before making any decisions regarding your finances.

  • We explore what are the pitfalls of a lifetime mortgage, which provider is best for you, and how to apply for a lifetime mortgage. 

Understanding Lifetime Mortgages

Lifetime mortgages have gained popularity among homeowners aged 55 and over as they provide a flexible solution to access a percentage of your home’s value without having to sell or make monthly repayments. 

But is a lifetime mortgage the same as equity release?, and what factors should you consider when exploring lifetime mortgage providers?

Let’s delve deeper into the world of these mortgages and uncover the essential information you need to make an informed decision.

 

What is a lifetime mortgage?

A common question we are asked is what is a lifetime mortgage?

A lifetime mortgage is the most popular type of equity release plan and allows homeowners to unlock the equity in your property without having to sell it. 

The loan is secured against the property, and no monthly repayments are required during the homeowner’s lifetime, although payments can still be made, if desired. 

Instead, the mortgage is repaid when the homeowner passes away or moves into long-term care, with the remaining funds after the mortgage is settled paid to your estate. 

This provides a financial solution for homeowners to unlock the wealth in their property while maintaining independence and considering funeral insurance, as well as addressing potential inheritance tax concerns.

How Does A Lifetime Mortgage Work

Lifetime mortgages operate by offering homeowners a lump sum or drawdown loan based on the property’s value. Interest is added annually, and the debt is repaid through the sale of the property when the homeowner dies or moves into long-term care. 

If you are considering how much you can borrow with a lifetime mortgage, we can help you calculate all your options and provide detailed illustrations. 

This means that homeowners can continue living in their homes without the stress of downsizing or pressure of monthly repayments, allowing them to enjoy their golden years without financial worries. 

However, it’s crucial to consult an equity release specialist to ensure you choose the right plan for your needs.

Lifetime Mortgage Reviews: What's best For My Needs?

Our Lifetime mortgage reviews provide valuable insights into customer satisfaction and potential pitfalls to consider when applying for a lifetime mortgage. 

Are lifetime mortgages a good idea, and what should you look out for?

When comparing providers, it’s essential to consider both positive and negative reviews, as they can help you make an informed decision that fits your unique needs and preferences.

Let’s explore some of the most common themes found in lifetime mortgage reviews and what they could mean for your decision-making process.

Positive Reviews: Customer Satisfaction and Trustworthiness

Positive reviews often emphasise the certain benefits of lifetime mortgages lenders over another, such as flexibility with the type of property they may lend on, flexible repayment options, and competitive interest rates. 

These reviews can also highlight the trustworthiness of providers, as many are regulated by the Financial Conduct Authority (FCA) and the Equity Release Council (ERC).

The FCA ensures that customers receive high-quality advice, while the ERC provides a guarantee that the amount owed will never exceed the value of the home, offering peace of mind for homeowners considering a lifetime mortgage. 

Additionally, the financial services compensation scheme plays a role in protecting consumers in the financial market.

Negative Reviews: Common Complaints and Red Flags

On the flip side, negative reviews may reveal common complaints and red flags, such as hidden fees, poor customer service, or inflexible terms. 

These issues could impact your overall experience with a mortgage provider, making it essential to carefully consider both the pros and cons before making a decision.

By thoroughly researching and comparing providers, we ensure that you’re choosing a mortgage plan that best suits your individual needs and preferences.

Top Lifetime Mortgage Reviews

The top lifetime mortgage providers include Standard Life, Aviva, Canada Life, More 2 Life and Legal & General. 

Each of these providers offers different plans, competitive equity release interest rates, and features, catering to a wide range of homeowner needs.

By understanding the unique offerings of each provider, you can make an informed decision about which mortgage plan is the best fit for your financial situation.

Let’s take a closer look at these top providers and what they have to offer.

Aviva

Aviva offers a choice of two Defaqto 4-star rated lifetime mortgages. 

They offer flexible mortgages that allow you draw down money as and when you need it. 

They have a flexible repayment option which allows some or all of the monthly interest to be repaid to help reduce the effect of compound interest, up to 10% of the sum borrowed can be repaid per year.

Aviva offer defined exit fees starting at 10% in year 1 which reduces by 1% each year.

Canada Life

Canada Life are an established equity release provider and offer flexible mortgages which allow you draw down money as and when you need it. 

They have a flexible repayment option which allows some or all of the monthly interest to be repaid to help reduce the effect of compound interest. Up to 10% of the sum borrowed can be repaid per year.

They also offer a feature called downsizing protection, which offers added flexibility for moving home and settling the plan early. 

They have fixed early repayment charges compared to many of the other lenders available.

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Legal & General

Legal & General offer two Defaqto 4-star rated lifetime mortgages. They offer flexible mortgages that allow you draw down money as and when you need it.

They offer a flexible repayment option which allows some or all of the monthly interest to be repaid to help reduce the effect of compound interest. Up to 10% of the sum borrowed can be repaid per year.

They also offer a retirement interest only mortgage (RIO), which does not offer the same level of protection as a lifetime mortgage, as there is a risk of repossession if the monthly repayments were defaulted on.

Legal & General offer defined exit fees starting at 10% in year 1 which reduces by 1% each year.

More 2 Life

More 2 Life offer equity release plans include enhanced terms for certain medical issues, which could increase the level of lending available.

They offer flexible mortgages which allow you draw down money as and when you need it. 

They have a flexible repayment option which allows some or all of the monthly interest to be repaid to help reduce the effect of compound interest. 

Up to 10% of the sum borrowed can be repaid per year.

More 2 Life have several options with their early repayment charge criteria, most of which are fixed and defined.

Later Life Finance

Later Life Finance are technically a broker. 

We are passionate about providing expert equity release advice from the whole market on an independent basis. 

With access to the best companies, plans and deals available, we can secure the right lifetime mortgage for your requirements. 

Get in touch with our experts on 0800 2465228 for advice on all your options.

Factors to Consider When Choosing a Lifetime Mortgage Provider

mature couple research equity release companies reviews and which to choose

When choosing a mortgage provider, it’s important to consider factors such as:

  • Interest rates

  • Fees

  • Flexibility

  • Reputation

By thoroughly researching and comparing providers, we can ensure that you’re getting the best deal and the most suitable plan for your specific needs.

In this section, we’ll explore some of the key factors to consider when evaluating mortgage providers and how to make the most informed decision possible.

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Interest Rates and Fees

Comparing lifetime mortgage interest rates and fees among providers is crucial to ensure you’re getting the best deal on your mortgage. 

By carefully comparing the interest rates and criteria of each lender, Later Life Finance can ensure you find the correct solution for your overall requirements. 

Flexibility and Customisation

Providers that offer flexible and customisable plans are more likely to meet your individual needs and preferences. 

This can include options such as voluntary repayments, drawdown facilities, and regular or occasional small payments.

By choosing a provider that offers a range of flexible and customisable plans, we ensure that you’re getting the best value for your money and a plan that fits your needs.

Reputation and Customer Service

Researching the provider’s reputation and customer service is essential to ensure a positive experience throughout the mortgage process. 

This includes:

  • Reading customer reviews

  • Checking for membership with organisations such as the Equity Release Council

  • Ensuring the provider is regulated by the Financial Conduct Authority

Safeguarding Your Lifetime Mortgage Decision

To help with making an informed decision, it’s important to:

  • Choose a provider with Equity Release Council membership

  • Look for a provider that offers a negative equity guarantee

  • Consult with family and beneficiaries

These safeguards can provide additional peace of mind and ensure that you’re making the best decision for your financial future.

In this section, we’ll discuss each of these safeguards and their importance in making the best decision for you.

Equity Release Council Membership

Membership in the Equity Release Council ensures that providers follow strict rules to protect homeowners. 

The council sets stringent regulations and requires providers to offer a negative equity guarantee as part of their equity release plan. 

By choosing a provider with Equity Release Council membership, you can have confidence in the safety and security in your home for the years to come.

Negative Equity Guarantee

A negative equity guarantee is a crucial safeguard for homeowners considering equity release. 

This guarantee ensures that you will never owe more than the value of your property when repaying the loan, protecting you from potential financial pitfalls.

By choosing a provider that offers a negative equity guarantee, you can have peace of mind knowing that you and your estate are protected from negative equity arising. 

Consulting with Family and Financial Advisors

Mature couple using a laptop while relaxing at home Comparing the best Equity Release companies available on a laptop
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Discussing your decision to release equity with family members and consulting our expert advisers is a vital step in ensuring you’re making the best choice for your situation. 

These conversations can provide valuable insights and guidance, helping you to:

  • weigh the pros and cons of different equity release plans and providers

  • understand the potential risks and benefits

  • explore alternative options

  • make an informed decision

By involving your loved ones and seeking professional advice this will help with making an informed decision. 

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Summary

In conclusion, lifetime mortgage reviews and evaluating providers based on factors such as interest rates, fees, flexibility, and reputation is crucial to making the best decision for your financial future. 

By researching providers, comparing rates, and seeking expert advice, you can find an equity release plan that meets your unique needs and preferences. 

Later Life Finance take the time to thoroughly understand your options and help you make a decision that best aligns with your goals and circumstances, by considering lifetime mortgage reviews and discussing your plans with later life finance you will be in the best possible position to make an informed decision. 

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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.

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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