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How Much Can I Borrow On a Lifetime Mortgage?

You can lend your age minus 30 as a percentage of your home with a lifetime mortgage, more if you can afford to make monthly payments to stop, or slow, the roll-up of interest.

For example, if you are 65 years old, you will be able to lend approximately 35 of your home’s value on a lifetime mortgage without having to make monthly payments.

Age 65 – 30 = 35% Lifetime Mortgage (This is Approximate and Can Be Used to Buy a New Home or Release Equity)

If you can afford to make monthly payments you will be able to borrow more, this is called an interest-only lifetime mortgage.

The above figures are used as a general guideline, the exact amount you can borrow will depend on your situation.

If you are looking to purchase a new home, using a lifetime mortgage, often called equity release, will allow you to look for a more expensive property which may be more suitable for your requirements.

If you are considering releasing equity from your home via a lifetime mortgage and do not require all the money at once, a drawdown lifetime mortgage may work well for you.

This is where you receive the money in smaller chunks, this method can save you a lot of money in interest in the long term.

The money raised via a lifetime mortgage can be spent as you wish, popular uses are home improvements, a large purchase such as a car or motor home, a caravan, helping family members, or as an income to supplement your pension.

A lifetime mortgage is a long-term lending solution, if you are looking for more short-term lending then there may be more suitable bridging loan products available for you to help you downsize etc.

The Importance of Mortgage Advice For Those Over 55

Suppose you are over the age of 55 and considering your lifetime mortgage options. In that case, it is always a good idea to speak to a specialist later-life broker as there may be more suitable products available to you.

A lifetime mortgage should always be the last resort; therefore, all traditional lending and retirement interest-only mortgages should be explored beforehand.

With all the products available to you, if you can afford to pay a monthly payment towards the interest, this can save you a lot of money over the term of the loan.

With a lifetime mortgage, the interest rolls up, therefore you start to pay interest on your interest on your interest etc.

The more you can contribute, even if it is a small amount or for a few years, the more money you will save over the long term.


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Author Image of Dan Osman - Head of Later Life at UK Moneyman Ltd.

About the Author

Dan Osman

Head of Later Life at UK Moneyman Ltd.

Dan joined the Financial Services sector back in 2002, but actually left the industry in 2008 before returning some years later. During the in-between years, he took a degree to become a Social Worker specialising in working with vulnerable adults.

Upon his return, Dan combined his experiences in the two sectors to become an Equity Release Specialist and he now heads up UK Moneyman’s Later Life Lending proposition. He genuinely believes in a holistic approach and always ensures his clients receive a proper consideration of all the options available, including non-lending alternatives to Equity Release.

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Registered Address: 10 Consort Court, Hull, HU9 1PU.

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