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Lifetime mortgages

Unlock tax-free cash out of your home and retain ownership without the stress of moving

Your lifetime mortgage explained

If you’re looking for ways to release funds from your home, you may be wondering “is equity release the same as a lifetime mortgage?”. Simply put, lifetime mortgages are the most popular form of equity release. It allows homeowners aged 55 and over to release tax-free funds tied up in their home. You can do it in two ways, either as a single lump sum or, following an initial release, in smaller amounts. The choice really is yours as to how you want the product to work for you.

So, how does a lifetime mortgage work? A lifetime mortgage is a loan secured against your home, it's typically repaid when you or the last surviving partner passes away or enters long-term care. You retain full ownership of your property and there are typically no monthly repayments to make, as the loan, plus roll up interest, is repaid when the plan comes to an end.

Who is eligible for a lifetime mortgage?

If a lifetime mortgage sounds like a financial solution you’d like to explore, first it’s important to check to see if you could be eligible. If you’re a homeowner aged 55 and over, you could release equity from your home!

It’s important to remember that you can’t take out a lifetime mortgage without taking advice first from a qualified equity release adviser - it’s a regulatory requirement. Our friendly and professional team are always on hand to answer any questions you might have, and to chat through the options available with you. So, whether you’re looking to release funds to take a once-in-a-lifetime holiday, pay for college or university fees or for something else, we could help you achieve your financial dreams at Key.

How does a lifetime mortgage work?

The amount you could release depends on things such as your age, health and the value of your home. With lifetime mortgages, you can take either a lump sum, where interest accrues on the full amount from day one, or following an initial release in a number of smaller amounts, known as a drawdown. This could save you thousands in interest if you don’t need all the money straight away. A member of our experienced team will be able to chat you through your options.

There are typically no repayments to make with a lifetime mortgage, as the loan, plus roll-up interest, is repaid when the plan ends. That's usually when you either pass away or move into long-term care. When you take out a lifetime mortgage, the interest accrues, then rolls up and is added to the loan. This is also known as compound interest. The tax-free funds you release through lifetime mortgages can be used in a variety of ways – see how our customers used theirs.

Your adviser can tailor and completely personalise your plan to make it suitable for your needs and wants – all depending on what’s important to you. For instance, with some of our plans, you can choose to guarantee an inheritance for your loved ones through inheritance protection. Find out more about this feature and leaving an inheritance.

Other features include the option to make capital repayments to reduce the overall cost of your plan, subject to criteria. And for added peace of mind, on some plans we can personalise your plan with downsizing protection so you can move home in the future if you need to. That usually comes into effect after you’ve had the plan for five years and if your new property doesn’t meet our criteria at the time, you can repay your plan without an early repayment charge.

As with any mortgage, what remains from the sale of your property after your plan has come to an end can be passed on as an inheritance. And because all of our plans meet the Equity Release Council standards, they all come with the no negative equity guarantee. That means you’ll never owe more than your home is worth, so you can’t pass on any debt accrued through equity release to your loved ones.

What are typical lifetime mortgage interest rates?

Annual interest rates from as low as 4.23% fixed for life with us. Most Key Equity Release customers have received a fixed annual interest rate of 3.77% or lower. The overall cost for comparison is 3.96% APR.*

*Lowest available rate correct as of 22 June 2022. All other stated rates correct as of 9 June 2022. Interest rate received and plan features are subject to eligibility. Ask for a personal illustration.

Enhanced lifetime mortgages

If you’re worried about a certain lifestyle choice or health problem affecting your chance of releasing equity from your home, then speak to your adviser about our enhanced equity release products. This type of lifetime mortgage plan could mean that you’re able to release more tax-free funds from your home.

In circumstances of poor health or by making certain lifestyle choices, you may be entitled to an increased lump sum or a lower interest rate. Your expert adviser will be able to take you through the options available to you.

Based on the health & lifestyle of the youngest borrower you may be eligible for an enhanced lifetime mortgage plan based on a number of factors, including but not limited to:

  • High blood pressure
  • Ongoing medical problems
  • Taking regular medication
  • Smoking regularly
  • History of heart issues
  • Being overweight
If you believe you may be eligible for an enhanced lifetime mortgage, and are interested in applying, speak to one of our expert equity release advisers.

Combined options

Your plan is completely personal to you, the flexibility of our lifetime mortgages at Key offers you just that. And, because of their flexible nature, they can be tailored to your future needs too.

Protected plans

If you want an added layer of protection for you and your property, you can safeguard a percentage of your home’s future value to be passed on as an inheritance with some of our equity release plans. When you’re discussing your options with your adviser, make sure they’re aware of how important this is to you, and they’ll be sure to explain it in more detail.

Ready to see how much tax-free funds you could release

If you’ve decided that our lifetime mortgages might be the solution for you, you can see how much in tax-free funds you could release from your home. Head over to our free, no-obligation online lifetime mortgage calculator, and see if you could release the funds you’d like to

Arrange Advice

Once you’ve seen how much equity you could release and you think you’d like to take the next steps, why not arrange a call with one of the experts here at Key. We’ll always act in your interests and ensure you consider alternatives.

If it’s not right for you, we’ll always tell you. Arrange your no-obligation chat with our friendly team today and find out how we can help.

Get your free guide

If you’d like to do some more reading into equity release and have our lifetime mortgages explained further, download our free equity release guide to find out more. In this comprehensive pack, you’ll find even more information about our lifetime mortgages, our other products and how we can personalise your plan to your wants and needs.

Before you go, here are some key things to consider

  • You have to get advice before releasing tax-free cash from your home - please read all our information and make sure it’s right for you
  • All our equity release advice relates to our range of Key branded products only, and our fixed advice fee of £599 is only payable on completion.
  • Key Equity Release offer lifetime mortgages only, which is a loan secured against your home. It will reduce the value of your estate and may affect your entitlement to means-tested benefits
  • All of our plans meet the Equity Release Council standards and come with several protections, including the no negative equity guarantee, which means you’ll never owe more than your home’s value
Page last updated: Thursday 23 June 2022