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Lifetime Mortgages and Equity Release

Are you considering a lifetime mortgage but you’re not sure of the details?

Our Expert Advisers Robert Sherlock and Anne Preston answer your top questions on equity release and lifetime mortgages:

The lifetime mortgage market is experiencing rapid growth as more people look to boost their retirement income and improve their standard of living. According to the Equity Release Council a total of 3.92 billion pounds of housing equity was withdrawn by older homeowners in 2019.

What is a lifetime mortgage?

A lifetime mortgage also known as equity release is when you access the equity or ‘cash’ in your home as a tax-free lump sum or as a regular income to enhance your pension.

It’s a mortgage that is only required to be repaid on death, going into long term care, or moving property.

Who can have a lifetime mortgage?

Lifetime mortgages are available to homeowners aged 55 and above. There may also be a minimum property value requirement.

What can a lifetime mortgage be used for?

The cash taken from equity release, or a lifetime mortgage, can be used for any of the following:

  • repaying the original mortgage
  • repaying debt
  • an emergency fund
  • home improvements
  • gifting deposits to family or friends
  • a holiday

The money can not be used for investment purposes.

Do I still own the house?

Yes, you do still own your house. The mortgage company only requires the loan to be redeemed on death, long-term care or moving home. There are also ways to protect inheritance for family and friends.

Are there any pitfalls?

Expert personalised advice is vital when considering equity release and lifetime mortgages. Borrowing against the equity in your home can release much needed funds to improve your quality of life in retirement or even help out family members but the potential pitfalls must also be understood. At Stan Sherlock Associates we take a holistic view of your retirement finances before recommending a lifetime mortgage product to you.

Lifetime mortgages aren’t right for everyone. But we can offer a thorough understanding of the benefits, drawbacks and costs and, if suitable, find the right deal for your individual circumstances.

What should I look for in an adviser?

All professional advisers dealing with equity release or lifetime mortgages must have a specialist qualification. At Stan Sherlock Associates Director and Practice Principal, Bobby Sherlock, and Mortgage and Protection Adviser, Anne Preston, are licensed to advise in this area.

Stan Sherlock Associates is a financial planning firm based in Carlisle and invests regularly in updating the skills and qualifications of its team to ensure clients receive the highest levels of advice.

Stan Sherlock Associates | For lifelong financial success

Please contact one of the team on 01228 598821 or email us on info@stansherlock.com to discuss your individual requirements.

A lifetime mortgage is not suitable for everyone and may affect your entitlement to means tested benefits, so it is important to seek financial advice before taking any action. If you are considering releasing equity from your home, you should consider all options available before equity release.

The interest that may be accrued over the long term with a Lifetime Mortgage, may mean it is not the cheapest solution. As interest is charged on both the original loan and the interest that has been added, the amount you owe will increase over time, reducing the equity left in your home and the value of any inheritance, potentially to nothing.

Although the final decision is yours, you are encouraged to discuss your plans with your family and beneficiaries, as a Lifetime Mortgage could have an impact on any potential inheritance. We would also encourage you to invite them to join any meetings with your Financial Adviser so they can ask questions and join in the decision, as we believe it is better to discuss your decision with them before you go ahead.

Approved by the Openwork Partnership on 27/09/2023

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