Lifetime mortgages

A lifetime mortgage is a regulated mortgage contract and therefore comes under the supervision of the Financial Services Authority. They are secured on a property by means of a first charge.

Lifetime mortgages are:-

• Available only to older borrowers over a certain age

Lenders may or nor may not specify a term for the mortgage, but cannot seek full repayment of the loan until one of the following events occurs:-

• Death
• The borrower moves to live elsewhere i.e. residential care
• The borrower moves to another residence
• The borrower sells the property
• The lender exercises its legal right to take possession under the mortgage contract

While the borrower occupies the property as a main residence, the arrangement can be on the basis that:-

• No regular payment of interest or capital is required, although interest can be charged and rolled up to be repaid at the end of the mortgage; or
• Payment of interest will be required but the capital is not repaid until the end of the mortgage; or
• Payment of interest and partial repayment of the capital may be required, but full repayment of the capital is not required until the end of the mortgage.

The majority of lifetime mortgages are on an interest roll up basis, although some are arranged on a straightforward interest only basis.

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260, or visit us at