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Equity Release & Lifetime Mortgage FAQs

A lifetime mortgage is a big financial decision for people over the age of 55, and there are a plethora of misconceptions surrounding equity release. As more products and features are entering the growing equity release market, it can feel overwhelming and confusing. In this blog post, we’re answering some lifetime mortgage FAQs surrounding this flexible and cost-effective financial product.

Will I lose my home?

No… You will retain 100% ownership until you pass away or move into long-term care when your estate will normally sell your home to repay the mortgage, however, if the family wishes to keep the property, they can repay the mortgage in full at this time using funds from elsewhere or potentially raising a mortgage on the property themselves to repay the lifetime mortgage.

All equity release products regulated by the Equity Release Council include a ‘No Negative Equity Guarantee’ which means you will never have to pay back more than the house sells for at the normal market price. Any amount owing over this figure is written off by the lender.

How much money could I release from my home?

Typically, you can release between 20% and 60% of your property’s value, however, there are several variables that come into play including the condition of your property, your age and health and whether it is a joint application.

miniature old man and house representing equity release


What’s the difference between equity release and a lifetime mortgage?

A lifetime mortgage is actually a type of equity release product. It is the most popular type of plan, making up 99% of products on the equity release market. A lifetime mortgage is simply a loan secured against your home that will run for the rest of your life. You will not have to make monthly repayments.

Could I repay the loan in full if I wanted to?

Yes, you can repay the loan in full at any time, however early repayment charges may apply.

What about inheritance?

Any type of equity release product can reduce the value of your property. The money borrowed and the interest accumulated will have to be paid off when you pass away. If you are concerned about what you leave behind for your loved ones, it is worth looking for a lifetime mortgage product that has an ‘inheritance protection guarantee’, which is a facility that allows a certain percentage of the value of your home to be protected for your beneficiaries.

What is a ‘drawdown’ facility?

A drawdown facility means that you receive an initial lump sum and then you are able to access pre-agreed funds as and when you like. To learn more about this product feature, read our blog post.

Do you have more questions about equity release? We’re here to answer them. Contact us here.