A lifetime mortgage is a form of equity release. Equity release is about giving people the flexibility and choice to unlock cash from their home in later life. But a lifetime mortgage is a big financial decision – and a lot of myths still remain about how they work.

“I won’t own my own home anymore”

The truth is that having a lifetime mortgage does not mean you are selling your home to the lender. It’s a loan secured against your home that will be repaid when you die or move out of your home and into long term care.

“I’ll end up paying more than the value of my home and my children will inherit my debt”

Lifetime mortgages are protected by the Equity Release Council’s, “No Negative Equity” guarantee. You, or your estate, will never owe more than the value of your home. You will never have to pay back more than the amount your property is sold for.

“I won’t be able to move home”

The truth is you can transfer the lifetime mortgage to a new property, providing the property is suitable. Get in touch with your financial advisor if you want to check property suitability.

“I can’t release equity as I already have an outstanding mortgage”

The truth is even if you have an outstanding residential mortgage, you can still release equity, providing you use the lifetime mortgage to repay the interest-only mortgage first. This is dependent on the equity available, your age and the terms and conditions of the mortgage.

“I’ll have to make monthly repayments”

Some products do offer the option to pay off interest, but you are not obliged to make repayments. You may prefer to allow the interest to roll up and be repaid when you die OR move into long-term care. There’s a range of products available to suit your needs.

“Equity release is just a last resort for those desperate for money”

People say that they have, or would take out, a lifetime mortgage for many reasons: More than a third use the money to refurbish or renovate their home. 17% use the money for a dream holiday, whilst 13% use the money to help buy a new vehicle.

If you’d like to find out more or are considering an Equity Release product, contact us today. We can advise you on whether equity release will help you achieve your financial objectives.