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Yes, you can, but it’s not always straightforward. Lifetime mortgages are designed to last for life, but some homeowners choose to reduce or clear the balance early.
Whether this is possible depends on your lender’s rules, any early repayment charges (ERCs), and what other options might be available.
What Happens If You Want to Pay It Off Early?
If you already have a lifetime mortgage, you may be able to repay it in full or make smaller payments over time, but this depends on your agreement.
Some lenders allow voluntary repayments to slow down interest growth, while others apply ERCs, which often reduce over time.
Some homeowners use savings or an inheritance to clear the loan, while others make regular payments to reduce the balance.
Before making any decisions, it’s important to check your mortgage terms. Our mortgage advisors can help you understand your options and whether early repayment makes financial sense for you.
Can you pay off a lifetime mortgage early?
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Thinking About a Lifetime Mortgage? Here’s What to Consider
If you don’t yet have a lifetime mortgage but are looking into how they work, it’s useful to know that most don’t require repayments.
The loan is usually settled when the property is sold, either when you move into care or pass away. That said, some lenders now offer more flexible options.
If you think you might want to make repayments in the future, choosing a product that allows voluntary payments or has a fixed ERC period could be a good idea.
Our mortgage advisors can help you find a plan that fits both your current needs and your long-term plans.
What Else Can You Do Instead of Paying It Off?
If fully repaying your lifetime mortgage isn’t an option, there are other ways to manage it.
- Some homeowners switch to a new lifetime mortgage with better terms, such as a lower interest rate or more repayment flexibility.
- Selling your home and downsizing could generate enough funds to pay off the mortgage, especially if your property has increased in value.
- Standard mortgages are an option for some people over 50.
Many lenders offer traditional mortgage products with fixed repayments, which may be a better fit than equity release. Our advisors always check if this is a suitable alternative.
Will Paying It Off Affect Inheritance or Tax?
One of the main reasons people consider paying off their lifetime mortgage is to leave more behind for their loved ones.
Since interest compounds over time, making voluntary payments or repaying early can help preserve more of your home’s value. If inheritance is a priority, we can explore options that take this into account.
It’s also important to think about the wider financial picture. Changing your mortgage, whether through repayments, remortgaging, or selling, could have implications for tax or benefits.
While we can help with mortgage advice, a tax specialist can provide guidance on any financial impact.
Speak to UK Moneyman About Your Options
If you are thinking about repaying your lifetime mortgage or exploring alternatives, it’s important to get expert advice before making any decisions.
Every lender has different rules, and the financial impact of early repayment, switching products, or downsizing can be significant.
At UK Moneyman, our mortgage advisors are here to help you understand your options and find the best way forward.
We take the time to assess your full financial situation and recommend solutions that suit your needs, whether that means making voluntary payments, switching to a better deal, or considering a standard mortgage instead.
If you want to explore your options, get in touch with UK Moneyman today to speak with one of our experienced mortgage advisors.
