Lifetime Mortgage Providers
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If you’re short of money in retirement, you may look at lifetime mortgage providers to help supplement your pension.
There’s a huge demand for mortgages for people over 55, but the reality is that many people are denied credit in later life due to their age.
The good news is that there is a way around it!
Lifetime mortgages allow homeowners to access cash tied up in their homes without worrying about monthly repayments.
A record amount of property wealth was accessed via equity release in 2021 by more than 76,000 new and returning customers – you could be one of them!
As experts in our field, we discuss the following in this article:
This article is your complete guide to lifetime mortgage providers.
Our equity release experts share their knowledge on finding the right provider and scheme for your situation, and answers some of the most frequently asked questions about this type of equity release.
Let’s jump right in!
Lifetime Mortgage Providers: What You Need to Know
What you need to know about lifetime mortgage providers is that they don’t consider affordability when calculating how much money you’d be able to borrow.
This is because there are no compulsory monthly repayments with lifetime mortgages.
Other key facts you should know about lifetime mortgage providers are:
- For most providers, the minimum age for a lifetime mortgage is 55 years. For the rest, it’s 60.
- Some providers have a maximum entry-level age, usually around 80 to 95.
- All providers will require an appropriate valuation of your property.
- Some providers (often members of the Equity Release Council1) offer fixed interest rates and may allow for early interest repayments rather than letting it roll-up.
- Most lifetime mortgage providers offer a maximum loan to value (LTV2) ratio of between 50% – 60%.
Some providers may offer you more competitive interest rates, better early repayment deals, more flexibility, etc., so it’s crucial that you shop around for a plan that suits your specific needs.
Should Borrowers Use a High Street Lender or a Specialist for a Lifetime Mortgage?
A financial advisor can help you decide whether you should use a high street lender or specialist for your lifetime mortgage.
More lenders have started offering lifetime mortgages, leading to high street names such as Lloyds and Santander joining forces with traditional equity release lenders such as Legal & General or Canada Life.
Other high street lenders such as Santander and Natwest offer their existing interest-only mortgage customers aged 55 or older the opportunity to move over to a lifetime mortgage with Legal & General.
The rest offer Retirement Interest-Only mortgages instead of lifetime mortgages.
Interest rates vary between lenders, but a lifetime mortgage is generally more expensive than a standard residential mortgage.
There are some great products that you won’t find on the high street as these deals are only available via mortgage intermediaries.
How to Find the Best Equity Release Lifetime Mortgage Provider
You can find the best equity release lifetime mortgage provider by seeking guidance from an equity release advisor.
An advisor will help you choose the right provider to suit your circumstances as they already have a thorough knowledge of the available products for this type of finance.
Keep in mind
It’s essential to choose a provider that is a member of the ERC and authorised and regulated by the FCA3.
Making numerous mortgage applications with different lenders could harm your credit score4.
You can prevent it by using an equity release advisor who will know where to look for the best deals and from which lenders.
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Who Are the Top 13 Lifetime Mortgage Companies in the UK?
The top 13 lifetime mortgage companies are authorised and regulated by the Financial Conduct Authority.
They are also all members of the ERC and adhere to ERC’s no negative equity guarantee, so you will never owe more than the value of your home.
Here’s information about each.
Hodge Lifetime offers 2 types of lifetime mortgages: a lump sum option or a flexible drawdown option with interest rates that are fixed for life.
It also offers 2 other types of traditional mortgages aimed at customers who are aged 55 or over:
- Hodge Lifetime 55+ mortgage
- Hodge Lifetime retirement mortgage
Hodge’s plans also come with Downsizing Protection, which means you can pay your loan off earlier if you decide to sell your home and move to a different property and won’t incur any fees.
Its standard loan-to-value (LTV) is around 15% to 48%, and its products are only available through an advisor.
More 2 Life
More 2 Life has a wide variety of lifetime mortgage plans.
The different categories include:
Its plans have various features, such as Downsizing Protection, Inheritance Protection, Repayment Charge Exemption, cashback, and Partial Repayments.
More 2 Life’s LTVs usually range from 5% to 56%.
The Retirement Bridge Group is the UK’s biggest administrator of Home Reversions.
It comprises numerous companies, the 2 largest groups being Retirement Bridge Management Limited and Bridgewater Equity Release Limited.
Retirement Bridge home reversion plans are available to homeowners older than 60.
Retirement Plus offers home reversion plans regulated by the FCA to homeowners aged 65 and over.
Its schemes allow you to sell all or part of your property at less than its market value in exchange for a tax-free lump sum, a regular income, or both.
Liverpool Victoria (LV)
Liverpool Victoria (LV) offers both lump sum and flexible lifetime mortgages.
The minimum age for both products is 60.
LV bases its loan to value (LTV) on your age and property value, usually ranging from 20%-50% with the minimum initial advance or lump sum at £10,000.
LV’s Flexible Mortgages have a maximum loan of either three times the initial amount or the maximum LTV (depending on which is less).
You can draw from this cash reserve for 15 years, but each withdrawal must be at least £2,000.
Aviva, the UK’s largest insurer, offers flexible withdrawal and voluntary partial repayment options.
Its interest-only lifetime mortgages are available to homeowners over 55.
You can choose the Inheritance Protection option, which will help you protect some of your home’s value so that you can leave more to your estate5.
All Aviva’s lifetime mortgages include Downsizing Protection in case you want to downsize to a property that doesn’t meet the lending criteria.
Aviva’s LTV depends on your age and the value of your house but is usually between 20%-52%.
Canada Life’s Interest Select mortgages allow monthly installments of up to 50-100% of the interest each month for between 5 years and the full mortgage term.
Its products also have the option of Downsizing Protection after the 5th year and an ERC Waiver during the first three.
Canada Life has five different lifetime mortgage options:
- Capital Select
- Interest Select
- Lifestyle Options
- Second Home Options
It also has fixed Early Repayment Charges (ERCs) for the first 8 years and provides a free valuation of your home.
Legal & General
Legal & General offers lifetime mortgages to people over 55 with properties valued at £100,000 or more.
There are 3 types of lifetime mortgages available:
- optional payment
Its LTVs usually range between 38%-44% and come with the option to include Cashback and Inheritance Protection.
More 2 Life
Innovators in the later life lending field, More 2 Life provides a wide range of retirement lending solutions for 55s.
More 2 Life offers 5 different types of lifetime mortgages:
- More2Life Flexi Choice Plans
- More2Life Tailored Choice Plans
- More2Life Maximum Choice Plans
- More2Life Capital Choice Plans
- More2Life Prime Choice Plans
Its resourceful website includes various online tools such as a Partial Payment Calculator, a Loan to Value Calculator, and an Inheritance Protection Calculator.
More 2 Life is also responsible for industry innovations such as Fastpath, an automated online portal that simplifies the digital process.
Just’s lifetime mortgages offer an initial lump sum and a drawdown cash facility.
You can make monthly direct debit payments of between £25 and the maximum of the total monthly interest to reduce the roll-up as per the percentage of interest paid each month.
The minimum loan amount is £10,000, but you can take up to £30,000 if you make monthly payments.
Nationwide Building Society
Nationwide Building Society has a later life lending team that specialises in Retirement mortgages and equity release.
Nationwide offers its customers:
- Fixed interest rates for the duration of the mortgage.
- £1,000 cashback on completion.
- You can pay off 10% of your loan yearly without an early repayment fee.
- No product fees, valuation fees, or advice fees.
- Plans that include Downsizing Protection
Existing Nationwide mortgage customers between the age of 55 and 85 may apply for this form of finance.
However, if you are not an existing customer, you will be required to use an equity release advisor to help you find an alternative lender.
Pure Retirement plans are available to UK homeowners over 60 years old.
Pure Retirement offers 2 types of lifetime mortgages:
- Pure Max Drawdown
- Pure Sovereign
The Pure Max Drawdown plans have a cash facility and higher LTVs.
The Pure Sovereign plans have lower interest rates as well as lower maximum LTVs.
Both plans’ interest rates are fixed and do not require monthly repayments.
Responsible Lending specialises in Lifetime Mortgages for over 55s.
It offers both lump sum and drawdown lifetime mortgage options with no negative equity guarantee.
All its lifetime mortgage plans have fixed interest rates and do not require monthly installments.
Which Banks & Building Societies Offer Lifetime Mortgages?
The banks and building societies that offer lifetime mortgages are Scottish Widows and Nationwide.
Not many banks in the UK offer lifetime mortgages.
You’ll usually find that the banks that provide equity release are just advertising these products but will redirect you to one of the equity release companies.
However, there are some exceptions, such as Nationwide.
Santander also offers its existing clients over 55 the option to switch to a lifetime mortgage with an equity release provider such as Legal & General.
Scottish Widows Bank offers existing customers with interest-only mortgages the option to choose a lifetime mortgage plan.
The plans include:
- A drawdown facility for the first 7 years.
- Voluntary interest repayments without ERC fees.
- Downsizing and Inheritance Protection.
If you don’t fit its criteria, you need to use an equity release advisor to find a suitable alternative.
Lifetime Tracker Mortgages
A lifetime tracker mortgage, similar to a lifetime mortgage, is a tracker mortgage that lasts for the duration of your home loan.
There are numerous banks and building societies that offer lifetime tracker mortgages, including:
- First Direct
The big difference between a lifetime tracker mortgage and a lifetime mortgage is that the interest rate of a tracker mortgage can fluctuate; however, it’s still generally lower than a standard mortgage.
How Do I Apply to a Lifetime Mortgage Provider?
To apply with a lifetime mortgage provider, you need to first speak to an equity release advisor who will be able to help you choose the right provider for your circumstances.
Who Offers the Best Lifetime Mortgages?
The provider offering the best lifetime mortgages is the one with plans best suit your needs.
It’s also important to ensure that the provider is FCA regulated and to only consider companies that are members of the ERC.
What Features Do the Best Lifetime Mortgage Providers Offer?
The features the best lifetime mortgage providers offer are:
- Equity Guarantee
- Downsizing Protection
- Fixed interest rates
- Inheritance Protection
- Voluntary repayments
What Banks Do Lifetime Mortgages?
Most banks do not do lifetime mortgages; however, Scottish Windows, and Nationwide do.
Natwest and Santander offer existing customers over 55 with interest-only mortgages the opportunity to change to a lifetime mortgage with Legal & General.
What are the SAGA lifetime mortgage rates?
SAGA lifetime mortgages are 1.85% APRC⁶.
A lifetime mortgage can be a great way to free up some funds during retirement.
However, identifying which lifetime mortgage provider offers the right plan for you is a daunting task to take on yourself.
There are so many risks involved with this type of financing that it’s crucial to get it right.
Make sure to seek advice from a knowledgeable financial advisor who can find you the most competitive plans on the market as they work closely alongside many of the top lifetime mortgage providers on a daily basis.
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Editorial Note: This content has been independently collected by the EveryInvestor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.