Your retirement should be a time to enjoy life without having to worry about seemingly endless mortgage repayments and debts. If you’re eligible for a Lifetime Mortgage, you may be able to use this type of Equity Release to pay off your mortgage and debts so you can spend more of your retirement income on the things you love. In this guide, we’ll explain what a Lifetime Mortgage is, whether or not you’re eligible, and how you can use this type of Equity Release to get rid of your monthly mortgage and debt repayments to live a more comfortable retirement.
What is a Lifetime Mortgage?
A Lifetime Mortgage is a flexible, fair, and trusted way of releasing equity from your home to live a better life. It’s a type of Equity Release that has become increasingly popular in recent years. You can release up to 60% of the equity in your home as tax-free cash, you’ll still own your home and you’ll never go into negative equity, meaning you can continue living there as long as you wish. Unlike a regular mortgage, the interest for a Lifetime Mortgage can roll up into the loan itself, which will only be repaid to the lender once you die or move into permanent care and your home is sold. This means there will be no monthly repayments, affordability checks, or credit checks to worry about unless you choose to pay off the interest as you go.
Can I Use Equity Release to Pay Off My Mortgage and Debts?
Imagine what your retirement would be like if your income wasn’t being drained by monthly repayments. Continuing to pay off your mortgage and other debts during retirement often leads to financial worries and restrictions at a time when you should be leading a comfortable life. If you’ve built up a considerable amount of equity in your home, you may be able to use a Lifetime Mortgage to ‘cash in’ on that wealth rather than watch it build upon paper. Many older homeowners are now releasing equity to pay off their mortgage and debts, and as the interest can roll up into the loan, you don’t have to worry about monthly repayments.
The first step is to book a FREE no-obligation consultation with one of our qualified Equity Release specialists. Your advisor will answer all your questions and find the right deal for your situation from the whole market of lenders. The application process can take around three months to complete, and then your solicitor can use part of the equity you release to pay off your mortgage and debts, before transferring the remaining sum to your bank account.
Am I Eligible for a Lifetime Mortgage?
Exactly how much equity you’ll be able to release and at what rate will vary from lender to lender and will largely depend on your age, health, and the location and value of your property. We’ll work out what deals are available to you and how much you’ll be able to borrow during your free consultation.
To be eligible for a Lifetime Mortgage you must meet the following criteria:
- The youngest homeowner must be at least 55 years of age
- You must own a property in the UK worth at least £70,000
- You must have paid off most or all of your mortgage
What Else Can I Use a Lifetime Mortgage For?
You can use the equity from a Lifetime Mortgage however you wish. We would advise you to pay off your mortgage or other debts first, but if you have enough equity you may want to use it for other things such as funding home improvements, buying a holiday home, traveling the world, making financial gifts, or supplementing your retirement income.
The Bottom Line
If you’re in or approaching retirement and you’re still paying off your mortgage or other debts, a Lifetime Mortgage could allow you to free yourself from this burden so you can spend more of your money on the things you love. An increasing number of older homeowners are capitalising on the value of their homes by releasing equity to live a more comfortable life. With a Lifetime Mortgage, the interest can roll up into the loan so you don’t have to worry about monthly repayments. The loan is only paid back once you die or move into permanent care, and you’ll still own your home without ever going into negative equity.
At Michael Usher Equity Release we’ve been helping our local community with trusted Equity Release advice for 30 years. You probably have lots of questions, and we’re here to help you understand how these products work and whether they are the right choice for your situation. We’re never pushy, the decision is always yours to make, and we welcome your friends and family to join in the discussion. Book your FREE no-obligation consultation with one of our friendly advisors to learn more about Equity Release. We have offices in Frimley and Basingstoke, or we can help you remotely via phone or video call if you’d prefer. We look forward to chatting with you!
