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Yes, a lifetime mortgage can be used to buy a house to live in. Also, buying a house with a lifetime mortgage will allow you to afford a bigger property than without.
Buying a Property With a Lifetime Mortgage
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What is a lifetime mortgage?
A lifetime mortgage is a type of equity release plan that is designed to help customers over the age of 55 mortgage to release equity or buy a new property.
When using a lifetime mortgage to buy a house you’ll have the flexibility as to whether to make monthly payments towards the interest or not. The advantage of paying either all or some of the interest monthly will reduce the rate that your equity erodes from your property and increase the amount of inheritance you leave.
The amount you can borrow on a lifetime mortgage to buy a house will depend on the amount of cash you have available to put down as a deposit, your age/s, your health, the type/construction, and the purchase price of your house.
Lifetime mortgage products are usually a fixed rate for life, so unlike a traditional mortgage, the deal will not end or revert to a lender’s standard variable rate.
A lifetime mortgage is not a short-term lending solution and professional advice is required. Therefore, when buying a house with a lifetime mortgage you should consider any foreseeable changes in circumstances, and this will be factored into the advice and recommendation.
If in the future you would like to move house, most lifetime mortgage lenders will allow porting options.
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Popular situations of buying a house with a lifetime mortgage
We receive a lot of enquiries from those over 55 who are considering a lifetime mortgage to buy a house, here are some of the popular reasons:
- Currently renting.
- Living with family.
- Looking to move home for one reason or another.
- Upsizing or downsizing.
- To afford a more expensive property.
- Divorce/separation.
- Moving in with a partner.
- First time buyers aged 55+.
Lifetime mortgages are a great product to help customers achieve their objectives, however, there are alternative over 50’s mortgage products to consider beforehand such as:
- Regular repayment mortgages.
- Interest-only mortgages.
- Retirement interest only mortgages (RIOs).
What mortgage product is most suitable for you will depend on your current income, your future pension income, if you are buying a house with a partner, what your objectives with the property are, your credit history, the price of the house, and how much cash you have available as a deposit.
It’s always best to seek professional independent mortgage advice when considering a lifetime mortgage for a house purchase to consider the alternatives. A lifetime mortgage for a purchase should always be the last resort.
