A lifetime mortgage for over 60s lets you release money from your house while you are still living in it, and can be used to pay off other debts or save for retirement.

The lifetime mortgage is a type of home loan where the borrower agrees to repay the full amount borrowed plus interest over a fixed period (usually 30 years). The lender will usually require that the property is owned outright by the borrower at the start of the term. In this article, we explore the possibilities of getting a lifetime mortgage for over 60s age people in the UK. We will answer the questions such as what is an over 60s lifetime mortgage, can I get equity release mortgages for those over 60s, will I still own my home if I take a lifetime mortgage, how much equity can I unlock with an over 60s lifetime equity mortgage, what happens if my home goes into negative equity, will I owe more than my home is worth etc.

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Over 60s mortgage: lifetime mortgage for over 60s

Life doesn’t stop when you reach retirement age – many individuals over 60 are just getting started!

It’s an age when you are likely to remain fit and healthy but now freed from the shackles of a nine-to-five job. Instead, you have time to take up that new sport in which you’ve always been interested, pursue all manner of hobbies and pastimes, or indulge yourself in a long-dreamt round-the-world cruise.

Such ambitions are all very well, but how will you find the cash to pay for them? The answer could lie with equity release for the over 60s.

What is an over 60s lifetime mortgage?

A lifetime mortgage for over 60s is an increasingly popular form of equity release – and an expanding range of products has been developed in recent years to meet that growing demand.

Equity release allows a homeowner to unlock some of the cash otherwise tied up in their property through an equity release lifetime mortgage – cash they can choose to spend in any way they choose.

Just as the term suggests, this is a mortgage that lasts a lifetime – it is repaid from the proceeds of the sale of your home when you die or move into long-term care. But, best of all, it allows you to continue to live in the home you continue to own.

It is not only the capital that is repaid when the lifetime mortgage reaches full term. Instead of making monthly repayments of the accrued interest, you can elect to roll over those payments until they are repaid at the end of your equity release plan.

Can I get equity release mortgages for over 60s?

Not only is an equity release mortgage available for homeowners over the age of 60, but the range of plans providing such lifetime mortgages is ever-expanding.

Will I still own my home if I take a lifetime mortgage?

Not unreasonably, some people may worry about their home’s future ownership if they enter an equity release lifetime mortgage.

There is no need to worry because ownership of your home remains yours. Not only that, but with any plan approved by the industry’s self-regulatory body, the Equity Release Council, you have the assurance of retaining the right to stay in your home until you die or move into long-term care.

Only then is the capital loan and any accrued interest repaid from the proceeds of the sale of your home – and any balance from those proceeds passed on to your designated beneficiaries.

How much equity can I unlock with an over 60s lifetime equity mortgage?

Typically, the amount of equity you can release through a lifetime mortgage for the over 60s will depend on your age when you arrange the plan and the value of the home you occupy.

Your state of health may also come into play. Some providers of equity release for the over 60s, for instance, allow a greater amount of cash to be released if the homeowner suffers from particular health conditions – these might include high cholesterol or blood pressure, types of diabetes, or even those who smoke.

To gauge the amount of money you might free up through equity release for the over 60s, you might want to consult specialist financial advisers – such as us here at NeedingAdvice.co.uk – who can assess your eligibility, scour the market for suitable providers and discuss with you in detail all the implications of arranging a lifetime mortgage.

What happens if my home goes into negative equity? Will I owe more than my home is worth?

Plans that the Equity Release Council approves also come with the valuable guarantee of “no negative equity”. What does this mean?

It means that when the time comes for your home to be sold, if it fails to realise sufficient funds to repay your outstanding mortgage – because of a fall in house prices, for example – there is still nothing more for you to pay. In other words, neither you nor your beneficiaries will ever find that more has to be repaid than the market value of your home.

What do I need to consider with lifetime mortgages for over 60s?

A lifetime mortgage for those over 60s is not to be entered lightly. Indeed, you are obliged to consult professional financial advisers to discuss the implications of your decision before proceeding with any agreement.

One aspect of a lifetime mortgage for the over 60s that you might want to explore with your financial adviser is the impact of the interest that needs to be repaid. Depending on the plan you choose, you may elect to roll over some or all those interest payments until the termination of the mortgage through the eventual sale of your home (when you die or move into long-term care).

You will need to be aware, for example, that the accumulated interest can assume substantial proportions – and the repayment may seriously undermine the scale of any inheritance you were planning to lease to your loved ones.

Also, if you are on any means-tested benefits, your entitlement could be affected if you take a lump sum out of your property.

Next steps

There is a lot to consider if you are thinking about taking advantage of an equity-release mortgage for the over 60s.

You will want to discuss the implications of any such decision with financial advisers such as us here at NeedingAdvice.co.uk – financial advisers whom you can trust to provide advice and guidance based on extensive knowledge of the equity release market.

FAQs- Lifetime Mortgage For Over 60s

What are the monthly payments for a lifetime mortgage?

The monthly payment for a lifetime mortgage depends on how much you borrow and what type of mortgage you have chosen. The monthly payment is calculated by dividing the total cost of borrowing by the number of months left on the term of the loan.

For example, if you borrow £200,000 for 30 years at 4% per annum, then the monthly payment would be £1,848. If you borrowed the same amount for 25 years at 3% per annum, the monthly payment would be just £1,567.

What is the maximum age limit for a lifetime mortgage?

The maximum age limit for a lifetime mortgage is 75 years old. However, many lenders offer loans up to 80 years old. You can read further on our previous article on equity release for over 90s.

How do I know whether I qualify for a lifetime mortgage?

If you are looking to buy a new home, you should check whether you meet the criteria set down by the lender. You will usually need to show that you have enough money available to cover the purchase price plus the costs associated with moving.

If you already own a home, you will need to make sure that you can afford the mortgage repayments. This includes paying off existing debts and ensuring that you have enough money to maintain your current lifestyle.

The best thing is to contact a mortgage broker who can help you with the most suitable deals.

Can I get a lifetime mortgage without selling my home?

Yes, but only if you can prove that you have access to additional income. You can also use a lifetime mortgage to pay off other debts, such as credit cards or personal loans.

However, it’s important to remember that this option comes with its own risks. It’s not advisable to use a lifetime mortgage to finance the purchase of another house unless you are prepared to sell your first home.

In addition, if you decide to use a lifetime mortgage for more than one purpose, you might find yourself in trouble when you eventually try to sell your home.

You can always contact a mortgage adviser for more information.

What are the different types of equity releases?

You can find different types of equity releases in our blog section.

Can you afford a mortgage over 60?

This is a question we receive all the time from people wanting to take out mortgages over the age of 60. We think it’s worth answering because there are some things to bear in mind before making a decision.

Firstly, you need to look at your finances carefully. You may need to cut back on spending or increase your savings so that you can afford the monthly payments.

Secondly, you must consider how long you want to live on your property. If you plan to stay in your home for less than 10 years, you could save yourself thousands of pounds in interest charges by taking out an equity release scheme.

Finally, you need to weigh up the benefits against the drawbacks. Equity release schemes come with their own set of problems. For example, they don’t allow you to draw any cash out until you reach retirement age.

You can also contact an equity release adviser for further information.

We hope this helps!

About The Author

mortgage broker damian youell

See some of Damian’s client reviews below

Damian is an experienced mortgage broker, founder of NeedingAdvice.co.uk Ltd and company director. With over a decade working as a mortgage broker he has a strong understanding of hard to place mortgage cases. With hundreds of 5 star client reviews. hundreds of repeat clients his work speaks for himself.

He started NeedingAdvice.co.uk as a one man band with the philosophy of putting clients needs ahead of his own. This ethos of offering excellent customer service has helped the business grow over the years. He gets satisfaction on getting cases pushed through to offer stage where other mortgage broker and companies have failed.

Throughout his time as an adviser he has carved out a niche area of advice helping clients with their business protection requirements too. Having helped hundreds of client with Relevant Life Policies, Shareholder Protection Insurance, Keyperson Policies and other important protection requirements of large to small businesses.

At home he is a family man and likes to spend his time with his four children and wife Lisa. He enjoys going on holidays spending time with friends and going for walks.