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A lifetime mortgage is a loan secured on your home that allows you to release tax-free cash without having to move.
Lifetime mortgages are a type of equity release and as with all mortgages, it means you’re borrowing money against the value of your home. You don’t need to repay the loan until the last surviving borrower dies or moves into long-term care.
If you’re making plans for retirement, or already in retirement, and want to raise some funds to make lifestyle changes, or to help a family member get on the property ladder, a lifetime mortgage may be able to help you do this.
A lifetime mortgage frees up some of your home’s value, which you can take as a lump sum or in smaller amounts as you need it. It also means you can continue to live in your home, without having to move.
If you’re over 55 and have paid or are paying the mortgage on your own home, you might be eligible to apply for a lifetime mortgage. The home will still belong to you, and you won’t have to move.
In return for unlocking a percentage of the value of your home, you can choose whether to take one large lump sum or several smaller lump sums at a time of your choosing. You’re free to spend the money how you wish, whether it be gifting money to family members, funding your retirement plans, or something else.
Interest is charged on a lifetime mortgage and you can decide whether to make payments towards the interest or alternatively make no payments and the interest will be added to the loan to be repaid, usually when your home is sold. This is usually when the last named borrower dies or moves into long-term care. It’s important to note that ‘rolling up’ the interest onto the loan means the loan amount grows, so more interest will be added on each time.
We offer a limited range of lifetime mortgages from Scottish Widows Bank, a division of Lloyds Bank plc, and only offer first charge mortgages. We do not offer home reversion.
You have a number of levels of protection which include;
Interest rates on lifetime mortgages vary depending on a number of factors, including your age and the value of the property you’re borrowing against.
Maximum borrowing is based on age and property value so each customer will be different.
If you already have a mortgage on your home, or any other lending secured against it, this must be paid off using the proceeds of a new lifetime mortgage.
If you’re approaching retirement or already retired and are thinking about how to make the most of your finances, a lifetime mortgage could give your plans a well-earned boost.
There are lots of reasons why people choose to release equity from their home with a lifetime mortgage. Perhaps you’re looking to pay off an existing mortgage on another property. You might be drawing up plans for a new kitchen or bathroom, or perhaps there’s a family member who needs a little help getting onto the property ladder themselves. Having access to some of the value of your own home could make a real difference in later life.
Taking out a lifetime mortgage is a decision that shouldn’t be taken lightly which is why your adviser will always discuss your needs and circumstances to decide if a lifetime mortgage is right for you before going ahead.
Before you can apply for a Scottish Widows Bank Lifetime Mortgage, check that the following all apply to your situation so you can see if you could be eligible:
Find out if you can apply for a Scottish Widows Bank Lifetime Mortgage by using our Lifetime Mortgage Checker.
If you qualify, we will arrange for you to talk to an expert Scottish Widows Bank Later Life Lending Adviser at a time that suits you.
Or, you can call us on 0345 122 1607. Our lines are open Monday to Friday 8am – 8pm, Saturday 9am – 4pm. We’re closed on Sundays and Bank Holidays.
As a member of the Equity Release Council (ERC), Scottish Widows Bank offers a No-Negative Equity Guarantee. This means you won’t owe more than the value of your home when it’s sold to recover the debt.
With a lifetime mortgage from Scottish Widows Bank, you can make one voluntary payment each year, up to a maximum of 10% of your mortgage balance, not including interest, without having to pay an Early Repayment Charge. This could help reduce the amount of interest added onto the loan in the longer term. Any additional repayments, including if you repay the mortgage in full, during the first 10 years are subject to an Early Repayment Charge, starting at 10% in year one, decreasing 1% each subsequent year.
Means-tested benefits may be affected when you take out a lifetime mortgage. That’s because your income and capital are used to decide whether or not you’re entitled to access benefits such as Pension Credit. Taking out a lifetime mortgage may change your eligibility for benefits so you should ensure that you check this before going ahead.
No, with a Scottish Widows Bank Lifetime Mortgage you have the flexibility to decide when and how much of your loan to take out at a time. You might settle on smaller payments over a longer time frame or opt for a single lump sum in one go. How much you take out at a time could affect how much interest is added onto your total loan. Your Later Life Lending Adviser will be able to talk you through this and recommend what will be right for your individual circumstances.
Yes, you will still own your home and can continue to live there for as long as you like. The loan is paid off using the proceeds of the sale of the house after the last named borrower either dies or goes into long-term care.
Yes you can move home and take your lifetime mortgage to the new property so long as it meets our lending policy and criteria at that time.
If your new property doesn’t meet our lending policy and criteria then your lifetime mortgage comes with Downsizing Protection which means that after 5 years of having your mortgage, you’re able to repay your loan in full without incurring an Early Repayment Charge.