• Open at 9:00am Tomorrow
    • Monday - Thursday 9:00am - 8:00pm
    • Friday 9:00am - 5:30pm
    • Saturday 9:00am - 5:00pm
    • Sunday Closed All Day
    • Our Address

      Key, Baines House,

      4 Midgery Court, Fulwood,

      Preston, PR2 9ZH

  • UK FREEPHONE 0800 531 6027

Lifetime mortgages

Unlock tax-free cash out of your home and retain ownership without the stress of moving. We'll explain the benefits, risks and costs of a lifetime mortgage

Am I eligible?

You could be eligible if you're:
  • A UK homeowner aged 55+
  • With a property worth £70,000+
Calculate now

What a Key lifetime mortgage comes with:

  • Option to make no monthly repayments

  • No negative equity guarantee 

  • Retain 100% home ownership

Calculate now

ⓘ We'll explain to you:

  • That this product is a lifetime commitment

  • The benefits, risks and costs before going ahead

  • Your other later life finance options

What is a lifetime mortgage?

Lifetime mortgages explained: A lifetime mortgage is a type of equity release and is a loan secured against your home. It allows homeowners aged 55 or over to release tax-free funds tied up in their homes.

You always own your home

You keep full ownership of your property, so you could use this money now – to help loved ones or make home improvements, for example – without having to sell your home.

Choose how you get your funds

You can release funds from your home in a lump sum or a series of smaller amounts following an initial release. There are also flexible features available, such as voluntary ad-hoc repayments. The choice is yours as to which of the features are suitable for you.

No monthly repayments

There are typically no monthly repayments to make, as the loan – plus roll-up interest – is repaid when the plan comes to an end. If you want to reduce the long-term cost of your plan, you can make repayments of up to 10-12% without any early repayment charges.

How does a lifetime mortgage work?

The amount you could release with a lifetime mortgage depends on your age and the value of your home. When you take out a plan, the interest accrues then rolls up and is added to your loan. This is also known as compound interest. Typically, the loan is repaid through the sale of the property when the last remaining applicant either passes away or moves into long-term care.

Types of lifetime mortgages

You can take either:

  • A lump sum lifetime mortgage, where interest builds up on the full amount from day one.

  • A drawdown lifetime mortgage, with an initial release followed by smaller amounts as you need them. This could save you thousands in interest if you don't need all the money straight away.

It's worth noting that drawdowns are not guaranteed and are subject to the prevailing rate at the time, which may be higher than your original interest rate.

Additional features

Your adviser can tailor your plan to make it suitable for your needs based on what's important to you. This includes:

  • Optional partial repayments to reduce the overall cost of your plan, subject to criteria.

  • Downsizing protection, which allows you to move to a new home and repay the plan in full without any early repayment charges if your new property doesn't meet the lender's criteria. This comes into effect after you've had the lifetime mortgage for five years.

A member of our experienced team will be able to chat you through your options. Read more on lump sum vs drawdown lifetime mortgage.

As a trusted lifetime mortgage provider, all of our plans meet the Equity Release Council standards, meaning you'll: 

Have the right to move to another property

If you do wish to move, you'll have the right to take your equity release plan with you to a new home, subject to criteria at the time.

Have the right to stay in your home for life

With a lifetime mortgage, you still own your home. This gives you the right to stay in your home for life.

Never owe more than the value of your home

The no negative equity guarantee means you'll never owe more than your home's future value, so any debt accrued through equity release can't be passed on to your loved ones.

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? A lifetime mortgage is a type of equity release, allowing you to free up tax-free funds in later life.

The other type of equity release is a home reversion plan, which involves selling all or part of your home to a provider in exchange for a lump sum. We offer lifetime mortgages only, where you keep full ownership of your home.

Read more about lifetime mortgages vs equity release.

Benefits and drawbacks of a lifetime mortgage

We understand it's important you have all the information you need about equity release through lifetime mortgages to make an informed decision in your own time. Rest assured, though; if equity release isn’t right for you, we’ll tell you.

Lifetime mortgage benefits

Your specialist lifetime mortgage adviser will explain:

  • You can unlock cash from your home, tax-free, to help meet your needs in later life
  • You’ll always retain full ownership of your home and can stay in it for as long as you wish with a Key lifetime mortgage
  • You can choose to make reduced or no monthly repayments to suit your circumstances
  • You’ll never owe more than your home’s worth with a Key lifetime mortgage
  • You may be able to remortgage your plan in the future to release further funds or secure a better interest rate, although this isn’t guaranteed and may be subject to early repayment charges

Lifetime mortgage drawbacks

Your lifetime mortgage adviser will also outline the following important things to think about:

  • A lifetime mortgage is a loan secured against your home and subject to compound interest, meaning the amount you owe can grow quickly
  • Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits
  • Equity release may leave you with limited or no property equity remaining
  • Equity release will reduce your financial options in the future
  • A lifetime mortgage is a long-term financial product and is not designed to be fully repaid until the death or entry into long-term care of the last remaining borrower, otherwise early repayment charges may apply

Who is eligible for a lifetime mortgage in the UK?

If you’re a homeowner aged 55 or over, you could use a lifetime mortgage to release equity from your home to help boost your later life finances.

To take out a lifetime mortgage with Key, you must be a UK homeowner:

  • Aged 55+ (including all joint applicants)
  • With a property worth £70,000+
However, it’s a regulatory requirement that you get advice from a qualified equity release adviser before taking out a lifetime mortgage in the UK.

Our friendly professionals are on hand to answer any questions you might have and to chat through the options available with you.

If you currently receive or are eligible to claim means-tested benefits, taking out a lifetime mortgage may affect your eligibility as it will change your financial situation. Our advisers can review your current position and discuss your options moving forward including how a lifetime mortgage plan may affect any benefits you receive.

Read more about how a lifetime mortgage can affect your eligibility for benefits.

How much could I borrow with a lifetime mortgage?

Our latest research shows Key lifetime mortgage customers had access to an average of £78,334 from their properties (Key Market Monitor, 2023.). You'll just need to release a minimum of £10,000.

The amount you could release from your home depends on:

  • The value of your property

  • Your age

As each application is unique, use our calculator to get a tailored estimate of how much you could release.

Use our lifetime mortgage calculator

The tax-free funds you release through lifetime mortgages can be used in a variety of ways including:

  • Clearing an existing mortgage, loan, credit card balance or other debt - though you should always think carefully before securing a loan against your home to repay existing debt

  • Helping loved ones buy their first home, get married or go to university

  • Making home improvements, such as a new kitchen, allowing you to live comfortably for longer

  • Generally enjoying a more comfortable retirement

Learn more about why our customers release equity.

How much does a lifetime mortgage cost?

The overall cost of your lifetime mortgage borrowing will depend on a few factors.

These include:

  • The amount you want to release in tax-free funds

  • Your interest rate - your interest will be added, rolled up and compounded for the lifetime of the mortgage. See our latest lifetime mortgage interest rates below

  • Whether you take a lump sum, with interest charged on the full amount from day one, or a drawdown lifetime mortgage, where you only pay interest on the amount you release

  • Other costs involved with setting up lifetime mortgages including solicitor's and advice fees

Read more in our detailed guide to how much equity release costs.

You may wish to repay some of your lifetime mortgage early and reduce the size of the loan you accrue interest on. Subject to criteria, we may be able to help you personalise your plan with the option of making ad-hoc repayments of up to 10-12% of the initial amount you've borrowed each year.

Additional repayments, including repaying in full, may incur early repayment charges. Your adviser will explain these terms clearly so you know what your options are.

What are typical lifetime mortgage interest rates?

Lifetime mortgage rates vary depending on the plan you take out and your circumstances. Our lifetime mortgage calculator will give you an illustrative rate based on the details you put in.

With a lifetime mortgage, the interest accrues, then rolls up and is added to the loan, meaning the amount you owe can grow quickly. As a result, equity release will reduce the value of your estate and may leave you with limited or no property equity remaining.

This is also known as compound interest. The interest rate you get will be specific to your circumstances and is fixed for the life of the loan.

Representative example

5.72% AER

Lowest rate with Key

6.58% AER

Rate most Key customers received, or less

6.94% APR

Overall cost for comparison

All rates correct as of 14th April 2024. This is based on customer data from the last 60 days, apart from Key’s lowest rate. Interest rate received and plan features are subject to eligibility. Ask for a personal illustration.

Interest rates explained

  • AER stands for Annual Equivalent Rate. It shows what the interest rate would be if the interest was compounded each year.

  • APR stands for Annual Percentage Rate. It's the cost you pay each year to borrow money, including fees, expressed as a percentage. 

Our equity release calculator will give you an idea of how much you could release. Your equity release adviser will be able to give you more information on interest rates.

Calculate now

Back to "What's in this guide?"

How does compound interest work?

Unless you choose to do so, there are no repayments to make on a lifetime mortgage until the plan comes to an end. As a result, you pay interest not only on the loan itself, but also on the interest that’s already been added to the loan. But there are ways you could reduce the total cost of borrowing of your lifetime mortgage, which we outline in this guide. 

Whether interest is added to your lifetime mortgage on a monthly or annual basis is dependent on your plan. During that first period, though, the interest is charged and added to the original loan amount - the sum of tax-free cash you unlock from your home’s value. 

  • In the period following, interest is then calculated and charged on what you owe (the original loan amount plus interest), not the amount you initially borrowed
  • This new, larger amount of interest is then added to your loan, and this cycle continues until the plan comes to an end
  • This means a larger amount of interest is added to your lifetime mortgage each period
  • The interest rate at the beginning of your plan determines how quickly the interest grows which will impact the total cost of borrowing over the term of the loan

An example of how compound interest accrues over 15 years

Year Balance at the start of the year MER¹ Interest added² Balance at the end of the year³
Year 1 £81,703 6.74% £5,681 £87,384
Year 2 £87,384 6.74% £6,075 £93,459
Year 3 £93,459 6.74% £6,497 £99,956
Year 15⁴ £209,360 6.74% £14,555 £223,915

This example is for illustrative purposes only and uses the average release amount of £81,703 and MER (monthly equivalent rate) of 6.74% - Key Market Monitor, Q1 2023..
¹ With all Key lifetime mortgages, the interest rate is fixed throughout the life of the plan
² Interest is charged on balance as at the start of the year, not the original amount
³ The balance at the end of the year including compound interest

⁴ This cycle continues throughout the life of the plan

Back to "What's in this guide?"

How could a drawdown lifetime mortgage reduce my cost of borrowing?

You could potentially save thousands over the course of your plan with a drawdown lifetime mortgage. This is because you only pay interest on the funds you release. It's important to keep in mind that future drawdowns are subject to the prevailing interest rate at the time and aren't guaranteed. Here's an example to help you understand how this could work for you.


ⓘ Illustrative example

This example is for illustrative purposes only and uses the average release amount of £81,703 and monthly equivalent rate of 6.74% (future drawdowns will be charged at the prevailing interest rate) - Key Market Monitor Q1, 2023.


Mrs Lewis and Mr Davies both want to release £81,703, but opted to take it out in different ways to meet their requirements.

Lump sum case study

Mrs Lewis (Lump sum: £81,703)

Mrs Lewis decided to take out all her money in one go through a lump sum lifetime mortgage. As interest is charged on the full release amount from day one the total cost of borrowing after 15 years could be £223,915 (based on a monthly rate of 6.74%) on her loan of £81,703.

Total cost of borrowing after 15 years: £223,915

Drawdown case study

Mr Davies (Initial borrowing: £51,703, Y5: £15,000, Y10: £15,000)

Mr Davies decided to take out an initial loan of £51,703 to meet his immediate requirements, then make two further £15,000 drawdowns over time (year 5 and 10). As he took out his money in stages, his total cost of borrowing was lower as interest is only charged when the funds were released.

Total cost of borrowing after 15 years: £191,064

Over the same 15-year period, borrowing the same amount of money, Mr Davies saved almost £32,851 in interest charges compared to Mrs Lewis.

Back to "What's in this guide?

How does the advice process work?

Releasing equity with a lifetime mortgage is a big decision and the team at Key understand that you’ll need to consider it carefully, so you will receive transparent advice before you apply.

ⓘ Did you know...

You have to get advice from a qualified equity release adviser before applying for a lifetime mortgage - it’s a regulatory requirement.

After you book a free callback for a time that suits you, one of our qualified advisers will get to know you and your needs to recommend the most suitable solution for your circumstances. And if they don’t think equity release is the right option for you, they’ll tell you. It’s part of our company ethos to be open and transparent with all of our customers.

Keep in mind that all our equity release advice only relates to our range of Key lifetime mortgages, a loan secured against your home. You'll only pay our fixed advice fee of £1,299 on completion of taking out the lifetime mortgage.

How to release equity from your home

Use our free calculator

Find out how much cash you could release tax-free from your home with our lifetime mortgage calculator

Speak to an adviser

Book an appointment with a specialist equity release adviser at a time that's good for you

Free expert guide

Get a copy of our free, comprehensive guide to lifetime mortgages. You’ll learn how they work, have your questions answered and help you put the life in later life

Applying for a lifetime mortgage is a decision you should think carefully about, and it is a regulatory requirement to get financial advice before doing so. If you're eligible and decide to go ahead, you can expect the process to take between 8-12 weeks from application to completion. This timescale can't be guaranteed, however.

Read more about how long equity release takes.

Your other options

Here are some alternatives that may be more suitable for you:

Equity release costs

Here are some guides to help you understand equity release costs:

ⓘ If another product is more suitable, we'll refer you to a different adviser within Key Group who can help. If you go ahead, you'll only be charged the same £1,299 advice fee you'd pay with us, even if their fee is usually higher.

Back to "What's in this guide?"

Why choose Key as your lifetime mortgage provider?

Equity release is a big decision and we understand that you’ll need to consider it carefully. When you come to Key, we will ensure you receive transparent advice before you apply. Find out more on why you should choose Key as your lifetime mortgage provider.

Highly experienced

We've spent 20+ years helping more than one million over 55s with their later life finances. Our knowledge means that, once we've taken the time to understand your needs, we’ll have a sound idea of what the most suitable plan is for you.

Expert tailored advice

We've won 80+ awards and we are rated 'Excellent' on Trustpilot with 17,000+ reviews. Making us the UK's most trusted equity-release specialist.

Trusted and award-winning

All our plans meet the Equity Release Council standards. Plus, we have over 17,000+ Trustpilot reviews giving us a 5-star rating and 80+ industry awards.

Customer stories

We've helped over one million people decide if equity release is right for them. Check out the great things our customers have to say about our professional advice and tailored plans.

John's story

69, Retired

“I sat down with the adviser and he went through every single detail and concerns, plus a lot more which I didn’t know about. They took care of everything… it’s so uncomplicated… the process is so easy.”

Read more on John's experience

Watch more of our customer stories

Back to "What's in this guide?"

What if I already have a lifetime mortgage?

If you already have a lifetime mortgage, over time you may decide you would like to release more funds or switch to a different plan. Your qualified equity release adviser can assess your options and talk them through with you so you know where you stand. They will discuss any early repayment charges that may be payable when switching plans.

Talk about your current Key plan

Call us on 0808 252 9170 to talk about your existing plan

Switch to Key from another provider

Call us on 0808 252 9170 to switch to Key

Lines open 9am-8pm Monday-Thursday, 9am-5:30pm Friday and 9am-5pm Saturday.

Find out if a lifetime mortgage is right for you

Calculate now

Use our lifetime mortgage calculator to see how much you could release

Arrange advice

Book a free appointment with one of our qualified advisers to learn more

Lifetime mortgage FAQs

Find common questions about lifetime mortgages explained below. If you are still unable to find the information you're after, we are just a phone call away.

A key benefit of lifetime mortgages is that you retain full ownership and can continue living there for as long as you like.

A lifetime mortgage is a loan secured against your home. Usually, when you or the last surviving applicant pass away or move into long-term care, your home will be sold to repay the loan. Any remaining funds from the sale will be passed on to your estate or your nominated beneficiaries.

We're proud members of the Equity Release Council and provide lifetime mortgages that meet their standards, including the no negative equity guarantee. This is an important protection which ensures you'll never owe more than the value of your home when your plan comes to an end.

This means there's no risk that you'll pass on debt accrued through equity release to your loved ones. In the unlikely event that your home decreases in value enough to leave a shortfall between the sale proceeds and the amount you owe, the no negative equity guarantee writes off the remainder of your loan.

However, it’s important to remember that a lifetime mortgage may leave you with limited or no property equity remaining, and it’ll reduce your financial options in the future.

For various reasons over time, you may decide that you want to move from the property you initially released equity from. You're free to sell your home and move to a new property as long as it meets our lending criteria at the time.

Your lifetime mortgage will be transferred to your new home. Bear in mind you may have to repay some of the funds you initially released if your new property is worth less than your current one. If the new property doesn't meet the lenders criteria then it will need to be repaid and an early repayment charge may be payable.

Lifetime mortgages are designed to be secured on your main residence, so they're not suitable if you intend to rent out your property. A buy-to-let mortgage could be more appropriate in this case. You may be able to let out individual rooms while still living there, however, subject to approval from your lifetime mortgage provider, though this isn't guaranteed.

As the name suggests, a lifetime mortgage is designed to last for life. It usually ends when you or the last remaining applicant pass away or move into long-term care. The home you released equity from will then be sold, with the proceeds used to repay the lender and any remaining funds going to your estate.

Read our equity release articles

A lifetime mortgage isn't something you should rush into. Read our RetireWise articles to learn more about how it works and whether it's right for you.

How does equity release work?


How long does equity release take?

Is equity release safe?

Page last updated: Thursday 04 April 2024