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A lifetime mortgage is a type of equity release that allows homeowners over 55 to access some of the money tied up in their property without having to move.
While it can be a useful financial solution, one of the biggest concerns people have is how it might affect their eligibility for means-tested benefits.
How Does a Lifetime Mortgage Affect Benefits?
Taking out a lifetime mortgage could impact certain state benefits, particularly those based on income and savings.
The money released from your home isn’t considered income, but if you don’t spend it straight away and it increases your savings above a certain threshold, it might affect what you’re entitled to.
Since everyone’s situation is different, it’s always a good idea to speak to a mortgage advisor who understands how these mortgages work.
If you’re unsure about how a lifetime mortgage might affect your finances beyond the mortgage itself, you may also want to speak to a qualified tax or pension specialist.
Alternative Mortgage Options for Over 50s
Lifetime mortgages aren’t the only option available for those looking to borrow at this stage of life.
Standard mortgages for over 50s are becoming more accessible, with lenders offering longer terms and flexible affordability checks.
Retirement interest-only mortgages (RIOs) are another option, allowing homeowners to make monthly interest payments while keeping the loan balance steady.
These alternatives often come with fewer implications for benefits, making them worth considering if you want to retain access to financial support.
A mortgage advisor can help explore these options to find the most suitable fit for your needs.
Why It Helps to Speak to a Mortgage Advisor
A lifetime mortgage is a significant financial decision, and expert advice is required before taking one out.
A mortgage advisor can explain how different mortgage options work and highlight any potential implications for benefits or future financial plans.
Even if a lifetime mortgage seems like the right choice, exploring alternatives can provide peace of mind and ensure you’re making the best decision for your circumstances.
If you’re considering a lifetime mortgage or looking into other mortgage options for your age group, speaking to a mortgage advisor can help you understand what’s available and how it fits into your financial plans.
