Finding the best lifetime mortgage provider can be time-consuming, especially as more companies enter the market: According to the Equity Release Council, the market grew 450% between 2013 and 2022.¹

With the right guidance, however, you can find the right fit if you're interested in taking out a lifetime mortgage to benefit from your home equity.

In this comprehensive guide, we'll explore the top lifetime mortgage providers, offering expert insights and unbiased comparisons to help you make an informed decision.

What Is a Lifetime Mortgage?

A lifetime mortgage is a type of equity release plan that allows homeowners over 55 to access the value of their property without having to sell it. 

A lifetime mortgage is a loan secured against the borrower's home.

Unlike a traditional mortgage, there are no monthly repayments required.

Instead, the loan, along with any accrued interest, is usually repaid when the homeowner passes away or moves into long-term care, with the property typically being sold to settle the debt.

How It Works

The amount that can be borrowed through a lifetime mortgage is typically a percentage of the home's value, based on the borrower's age and other factors. 

The provider will value the property, and the homeowner is then able to access a portion of that value as a lump sum or drawdown facility to use as they see fit, such as for home renovations, debt consolidation, or simply to supplement their retirement income.

Key Features to Consider

There are some key features to consider when looking into a lifetime mortgage.

Some of these are:

• No monthly repayments required during the lifetime of the loan
• The loan, plus any interest, is repaid when the property is sold
• Homeowners retain ownership and can continue to live in the property
• Flexibility in how the funds are used, from home improvements to supplementing retirement

By understanding the key features of a lifetime mortgage, you can get a better idea of whether this kind of loan could be an option for you.

Benefits of Choosing a Lifetime Mortgage

Benefits of choosing a lifetime mortgage include tax-free access to equity.

Other pros:

• No mandatory monthly repayments: The loan is usually repaid when you pass away or move into long-term care.
• Retain home ownership: You remain the legal owner of your property.
• Flexible payment options: Some plans allow voluntary repayments to reduce interest build-up.
• Inheritance protection: Certain plans let you ring-fence a portion of your home’s value for your heirs.
• Fixed or capped interest rates: Provides certainty about costs over time.
• No Negative Equity guarantee: Ensures you’ll never owe more than your home’s value when it is sold.
• Potential to improve lifestyle: Can fund home improvements, travel, or supplement retirement income.
• Regulated by the Financial Conduct Authority (FCA): Ensures consumer protection and fair practices.

It is, of course, important to weigh these benefits against the potential risks.

Drawbacks to Choosing a Lifetime Mortgage

Drawbacks to choosing a lifetime mortgage include the potential expense.

Risks and drawbacks to consider:

• Accruing interest: Interest compounds over time, meaning the total debt can grow significantly.
• Reduced inheritance: The amount left to your beneficiaries may be lower as the loan is repaid from your estate.
• Early repayment charges: If you decide to repay the loan early, you may face substantial fees.
• Impact on benefits: Receiving a lump sum may affect eligibility for means-tested benefits.
• Property restrictions: Some providers have limitations on certain property types or conditions.
• Limited flexibility: Once taken out, it can be difficult to switch or alter the terms.
• Potential moving restrictions: If you wish to move home, you must ensure the new property meets the lender’s criteria.
• Higher long-term cost: Compared to standard mortgages, the total amount repayable can be significantly higher.

To understand how these drawbacks may affect you, speak to a qualified equity release advisor.

Which Lifetime Mortgage Providers Are the Best?

​The best lifetime mortgage providers in the UK offer a range of products to suit various financial needs.

Here are some of the leading companies:​

• Aviva: Aviva offers flexible withdrawal and voluntary partial repayment options.² They also provide Inheritance Protection, allowing you to safeguard a percentage of your property's value for your estate.³​
• Legal & General: Legal & General offers an Interest Roll Up Lifetime Mortgage, an Optional Payment Lifetime Mortgage, and a Payment Term Lifetime Mortgage.⁴ The first two schemes allow for future borrowing if you don't take the maximum amount initially (though later withdrawals may have different interest rates), while the third option only allows for one lump sum and requires monthly interest payments for a set period. ​
• More2Life: More2Life provides a wide variety of lifetime mortgage services, including enhanced terms for certain medical issues, which could increase the level of lending available.⁵ ​
• Canada Life: Canada Life offers a range of equity release products, including lifetime mortgages with competitive rates and flexible drawdown options.⁶
• Just: Just provides medically underwritten lifetime mortgages tailored to individuals with health issues, and offers a 0.10% discount on interest rates to borrowers with an Energy Performance Certificate rating of C or higher.⁷

When selecting a lifetime mortgage provider, it's essential to consider factors such as interest rates, product flexibility, customer service, and the provider's reputation.

Consulting an independent equity release adviser can help ensure the chosen product aligns with your financial goals and circumstances.

How to Choose the Right Provider

To choose the right provider, take stock of what each one offers and weigh their products against your needs.

Here are some steps you can take:

1. Assess Your Needs and Goals: Determine how much equity you need to release and how you plan to use it (e.g., home improvements, supplementing retirement income, gifting to family). Consider whether you want a lump sum, a drawdown facility, or flexible repayment options.
2. Compare Interest Rates and Fees: Look for competitive interest rates, as these affect how much you’ll owe over time. Providers who are members of the Equity Release Council (ERC) offer only fixed or capped variable interest rates for predictability. Check for additional costs, such as valuation fees, arrangement fees, and early repayment charges.
3. Check Product Features: Some providers offer inheritance protection, allowing you to ring-fence part of your home’s value for your beneficiaries.
4. Choose a Reputable and Regulated Provider: Ensure the provider is regulated by the Financial Conduct Authority (FCA) and a member of the Equity Release Council (ERC). Look for established providers with positive customer reviews and strong reputations. Seek out recommendations from trusted friends, family members, or financial advisors who have personal experience with the providers you're considering.
5. Evaluate Customer Service: Look for client reviews on sites like Trustpilot⁸ and Smart Money People⁹ and compare what people are saying about the levels of customer service provided by different companies.
6. Check Property Eligibility: Some lenders have restrictions on property types, such as leasehold properties, flats, or non-standard constructions. Make sure your home meets the provider’s valuation and criteria.
7. Consider the Impact on Your Finances: Releasing equity may affect means-tested benefits (e.g., Pension Credit, Council Tax Reduction). It may also impact your ability to leave an inheritance.
8. Get Professional Advice: Speak to an independent financial adviser who specialises in lifetime mortgages. They can compare options from different providers and find the best deal for your circumstances.

This last step is arguably the most important.

Furthermore, receiving professional legal advice is mandatory before taking out equity release.¹⁰

How We Chose Our Top Lifetime Mortgage Providers

We chose our top lifetime mortgage providers by comparing product features, interest rates, and client reviews.

There are many lifetime mortgage providers, however, and you may find one that best suits your needs outside this list.

Is a Lifetime Mortgage Right For You?

A lifetime mortgage may be right for you if you meet certain criteria.

These include:

• You’re 55 or older: Lifetime mortgages are generally available to homeowners in later life.
• You want to access tax-free cash: It can provide a lump sum or drawdown facility without selling your home.
• You wish to remain in your home: You retain ownership and can stay in your property for life, or until you move into long-term care.
• You don’t want to make regular repayments: Most plans don’t require monthly payments, though all lifetime mortgages approved by the Equity Release Council since 2022 offer borrowers the option to make voluntary repayments.¹¹
• You’re comfortable with reducing your estate’s value: The loan and interest are repaid from your estate, which may leave less for your heirs.
• You may not qualify for traditional loans: Lifetime mortgages are often easier to obtain than standard mortgages or unsecured loans in retirement.
• You’re seeking financial flexibility: Whether to cover living costs, home improvements, or support family, the funds can be used for various purposes.
• You’ve considered the long-term impact: It’s important to weigh the effect on inheritance and benefits and seek independent advice before proceeding.

Before making a decision, speak with a qualified financial adviser and consider all your options, including downsizing or other types of borrowing.

Alternatives to Lifetime Mortgages

Alternatives to lifetime mortgages are options to consider if it turns out an equity release loan may not be right for you.

They include:

• Downsizing: Selling your current home and buying a smaller, less expensive property to release equity.
• Retirement Interest-Only Mortgage (RIO mortgage): A loan secured against your home where you pay the interest each month; the capital is repaid when you die or move into long-term care.
• Home reversion plan: You sell part or all of your home to a provider in exchange for cash, but continue living there.
• Unsecured personal loan: Borrowing a smaller amount without using your home as security, if your income and credit rating allow.
• Using savings or investments: Accessing funds from ISAs, pensions, or other investments instead of borrowing against your home.
• Help from family: Receiving financial assistance from children or relatives.
• Local authority grants or benefits: Certain councils offer support for home improvements or care needs that may reduce the need to borrow.
• Taking in a lodger: Letting out a room to generate additional income under the government’s Rent a Room scheme (up to a tax-free threshold).

It’s important to compare all options carefully and seek independent financial advice to determine which solution best suits your needs and circumstances.

Common Questions

Final Thoughts

Choosing the right lifetime mortgage is a significant financial decision that requires careful thought and professional guidance.

With a variety of plans available, each offering different features, benefits, and levels of flexibility, it’s essential to consider your personal circumstances, long-term goals, and the potential impact on your estate.

By seeking independent financial advice and comparing providers who are regulated and reputable, you can make a more informed choice that suits your needs.

Ultimately, understanding your options will help you find the best lifetime mortgage providers for your needs.