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What is a lifetime mortgage?

A lifetime mortgage is a popular type of equity release scheme that gives you tax-free cash to enjoy in retirement – while letting you keep 100% ownership of your home. But how exactly does a lifetime mortgage work? And is it the right option for you?

mature couple smiling at each other in front of a house

How does a lifetime mortgage work?

  • If you’re 55 or over and own your house, a lifetime mortgage lets you unlock cash for a more comfortable retirement in the form of a loan secured against your home
  • You still own your home and you can choose to make no repayments during your lifetime
  • The loan, plus any interest accumulated, gets paid off after you die or move into long-term care, from the sale of your home. (If your family can pay off the loan and interest without selling your home, that’s OK too)

Don’t worry, it’s regulated

You may have been wary of equity release schemes in the past, but equity release is now fully regulated by the Financial Conduct Authority (FCA) – providing peace of mind for all lifetime mortgage customers.

Because our preferred partner, Age Partnership, are members of the Equity Release Council, our customers have the reassurance we’re protecting them every step of the way.

We can also offer plans with a ‘no negative equity guarantee’, to make sure you never owe more than the value of your home.

wife smiling and looking over her husbands shoulder at a tablet

The different kinds of lifetime mortgage explained

Roll-up lifetime mortgage

You get a cash sum with no monthly payments. The cash sum is paid off, along with the interest built up on it, by the sale of your home when you die or move into long-term care.

Drawdown lifetime mortgage

Just like a roll-up lifetime mortgage, but you have the flexibility to release your cash over time rather than just taking one lump sum. The benefit is you can access your cash as and when you need it and interest is only charged on the amount you have taken. This could be suitable if you think you might need more money in the future as it helps you not to build up interest on money you’ve released but haven’t spent.

Flexible lifetime mortgage

You can choose to make voluntary payments to bring down your mortgage loan amount. Like any equity release lifetime mortgage, you still get a cash sum and keep ownership of your home.

Enhanced lifetime mortgage

Only for those with certain specified medical conditions, these let you unlock even more cash from your home, and you may qualify for better lifetime mortgage rates.

Interest only lifetime mortgage

This type of scheme lets you access a cash lump from your home, but rather than rolling up interest over the years, you pay off a certain amount of interest monthly. Essentially, this helps to reduce the amount needed to pay back from the sale of your home when you pass away.

Not sure which plan to choose? Your equity release adviser can talk through and explain the best options for you.

mature lady watering plants with a watering can

Why choose a lifetime mortgage?

  • Stay in control of your debt – However much cash you choose to unlock, with a ‘no negative equity’ plan, you’ll never owe more than the value of your home
  • Pick a plan to suit you – You can unlock as little as £10,000 tax-free, with more in reserve for when you need it. Choose from variable or fixed lifetime mortgage rates depending on the lifetime mortgage provider
  • Keep your home – You still own your home. You’re just borrowing against it. You may even be able to move, as long as the new house meets the conditions laid out by your provider – your lifetime mortgage will move with you
  • Get a tax-free lump sum – The cash you unlock is yours to spend any way you like (once you have repaid any outstanding mortgage or secured debt). Releasing equity may affect your entitlement to state benefits, but we’ll put you in touch with friendly lifetime mortgage advice to explain exactly what this means for you
  • Just think of the possibilities! How could a tax-free cash sum help transform your retirement?

What could you do with a cash lump sum?

Many people using equity release schemes spend their unlocked cash on getting mortgage and debt free or on home improvements*. Not a bad idea if you want to live a more comfortable retirement, with less out-goings and a nicer home to spend time in.

Or maybe you’d prefer to make the most of your retirement by taking those unforgettable holidays you’ve always dreamed of? It’s your money. Spend it your way.

Just remember, if you release equity, you are required to pay-off any existing mortgage and/or secured debt first.

*Age Partnership, 2017

mature couple on holiday wearing snorkels in the sea and taking a selfie

How much cash could you unlock?

Are you 55 or over with a home worth at least £70,000? See how much tax-free cash you could unlock with a lifetime mortgage to boost your retirement income with our online Equity Release Calculator. Based on your age and property value, we’ll give you an answer in seconds.

Unlocking cash from your home will reduce the value of your estate and could affect your entitlement to state benefits – such as pension credit, savings credit or even council tax benefit – so think carefully before taking a lifetime mortgage. And remember, while you can choose not to make repayments in your lifetime, interest will build up on your loan over the years.

Whenever you’re ready, we’re here for you

For more information and to check your eligibility, call The SunLife Over 55 Equity Release Service today on 0800 633 5566 or request a call back.

SunLife offers a range of straightforward and affordable products including over 50s life insurance, funeral plans, life insurance, equity release, pet insurance, home insurance, car insurance, ISAs and Will writing services

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife? 

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). Phoenix Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is entered on the Financial Services Register (registration no. 110418). As part of SunLife’s commitment to quality service and security, telephone calls may be recorded.

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan the funeral services are arranged and provided by Dignity Funerals Limited. Dignity Funerals Limited is a company registered in England and Wales No. 00041598. VAT registered No. 486 6081 14. 4 King Edwards Court, King Edwards Square, Sutton Coldfield, West Midlands, B73 6AP. Telephone No. 0121 354 1557. Fax No. 0121 355 808. Part of Dignity plc. A British Company. Dignity is not authorised or regulated for this activity by the Financial Conduct Authority or the Prudential Regulation Authority but is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

The funeral services are arranged and provided by Dignity Funerals Ltd which is not authorised or regulated for this activity by the Financial Conduct Authority or the Prudential Regulation Authority but is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides Family Life Insurance?

SunLife Family Life Insurance is provided by Scottish Friendly Assurance Society Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Details can be found on the Financial Services register (registration number 110002). Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ. 

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.