Roll-up interest
Nothing to pay each month. The interest is added to the loan instead, so the amount owed grows faster with this option than with the other one here.
What is a lifetime mortgage?
A lifetime mortgage is a loan secured against your home. You remain the owner and carry on living there as normal.
It's the most common type of equity release. If you're 55 or over and own your home, it can be a way to release some of its value without moving. I also advise on retirement interest-only (RIO) mortgages, where you pay the interest each month. For the whole process, from first conversation to completion, see our page on how equity release works.
Choice 1
What happens to the interest?
Paying some or all of the interest
Some plans let you pay part or all of the interest each month, which slows or stops the loan growing. On many plans these payments are optional, so check the terms. You can also make capital and interest payments if you wish.
Choice 2
How do you want to receive the money?
Lump sum
You receive the whole amount at the start. It's simple, and it suits a single, larger need such as clearing a mortgage or paying for building work. Interest is charged on the full amount from day one.
Drawdown
You take a smaller sum first and keep a reserve to draw on later. Interest is only charged on what you've taken, so it can cost less over time if you don't need all of the money at once.
Points to bear in mind
- The loan can grow quickly if interest isn't paid.
- It can reduce the value of your estate.
- It may affect your entitlement to means-tested benefits.
- Council members offer a no negative equity guarantee, so you'll never owe more than your home is worth.
Extra options that may be available
- Inheritance protection: keep back a share of your home's value for your family. It reduces how much you can borrow.
- Enhanced terms: some lenders offer more if you have certain health or lifestyle conditions.
- Fixed or capped rates: Equity Release Council standards require your rate to be fixed or capped for life.
Is it right for you? That depends on your age, health, home and what you'd like to leave behind. Sometimes it isn't the right choice, and if it's not right I'll tell you. This page is general information, not advice. I can talk through your options and explain what may suit you, alongside the alternatives to consider.
Still deciding?
That's what the first conversation is for. It's free, with no obligation.