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A payment-term lifetime mortgage is a type of equity release that could allow you to release more tax-free cash at a lower rate of interest than you would otherwise be able to through a comparable lifetime mortgage. In return, you commit to mandatory payments until the oldest applicant (for joint applications) turns 66.
After that point, you don't need to make any mandatory payments, although we’d always recommend paying what you can.
Similar to a lifetime mortgage, a payment-term lifetime mortgage is a loan secured against your home that allows you to release tax-free cash from your property. It's available to customers who are aged 55-62 on application and requires mandatory payments until the oldest applicant turns 66. The amount of extra money you could release compared to a lifetime mortgage depends on your age, house value, and your affordability.
Interest rates have risen significantly over the past 18 months. If you've been affected, and as a result are now struggling to or can’t meet your financial commitments, such as an existing mortgage, a payment-term lifetime mortgage could be the answer. A payment-term lifetime mortgage isn't right for you, however, if you're under 55 or over 62, are looking for a regular income, or if you don't want to or are unable to make mandatory payments.
Payment-term lifetime mortgages meet Equity Release Council standards, and you’ll automatically benefit from several protections and guarantees including:
*A payment-term lifetime mortgage may leave you with limited or no property equity remaining, and it could reduce your financial options in the future.
Like any financial product, a payment-term lifetime mortgage has several benefits. But it also has drawbacks you need to consider before making a decision. Your Key equity release adviser will help you decide if a payment-term lifetime mortgage is right for you. And if it isn’t, they'll tell you.
Your specialist equity release adviser will explain:
Your equity release adviser will also outline the following:
If you’re a homeowner aged 55-62, you could use a payment-term lifetime mortgage to release equity from your home to help boost your later life finances.
To take out a payment-term lifetime mortgage with Key, you must be a UK homeowner:
ⓘ Did you know...
Aged 55-62 with a property value below £125,000, or aged 63+?
You can still apply for a lifetime mortgage with optional repayments. If you're not eligible for either, why not try our later life mortgage finder? We may still be able to help you take control of your later life finances.
Releasing equity with a payment-term lifetime mortgage is a big decision, and at Key, we understand that you’ll need to consider it carefully. To help, you’ll receive transparent advice before you apply.
ⓘ Did you know...
You have to get advice from a qualified equity release adviser before applying for a payment-term lifetime mortgage - it’s a regulatory requirement.
You may have other, more suitable options that Key doesn't offer, which you should also consider before going ahead.
Criteria | Payment-term lifetime mortgage | Lifetime mortgage |
---|---|---|
Minimum age at application | 55 | 55 |
Maximum age at application | 62 | 95 |
Minimum property value | £125,000 |
£70,000
|
Mandatory payment period | ✓ | ⨉ |
Optional payments | ✓ | ✓ |
Credit score dependent | ✓ | ⨉ |
Equity release helps homeowners across the UK take control of their finances. It means they can live the later life that they deserve.
Explore how Key could help you put the life in later life. Request your free, comprehensive guide today.
ⓘ 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.
Here are some other later life finance options which Key doesn't offer but may be more suitable for you:
Home reversion
Downsizing
Unsecured lending
Using existing assets
Support from friends or family
You could release more tax-free cash with a payment-term lifetime mortgage than a comparable lifetime mortgage. But the amount you can unlock from your home depends on:
The overall cost of your payment-term lifetime mortgage borrowing will depend on a few factors.
These include:
Read more in our detailed guide to how much equity release costs.
Back to "What's in this guide?"
Equity release is a big decision and we understand that you’ll need to consider it carefully, by choosing Key we will ensure you receive transparent advice before you apply. Find out more on why you should choose Key.