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What is a lifetime mortgage?

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.

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How does a lifetime mortgage work?

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;

  • Professional equity release advice, with our expert equity release team, who will discuss your personal situation, your needs and circumstances, to understand which may be the right plan for you.
  • You continuing to own your home and the right to keep living in your home for as long as you wish
  • A no negative equity guarantee, which ensures you won't owe more than the value of your home when it is sold to repay the mortgage.

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.

Who should consider a 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.

What should I consider before taking out a lifetime mortgage?

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.

  • You can take a cash lump sum, or a lump sum and then smaller amounts over time.
  • You'll continue to own your home until the mortgage needs to repaid upon death or long term care of the last surviving borrower. 
  • You can set aside some of your home’s value to be passed on as inheritance however this may be reduced if you take a lifetime mortgage.  
  • No monthly payment is required but interest will continue be added to the amount owed. 
  • You'll have the right to move to an alternative property (subject to lending policy and criteria at the time) without having to pay any early repayment charges. 
  • You'll be protected by the ‘No Negative Equity Guarantee’ meaning your estate won’t have to repay more than what your home sells for even if you owe more.
  • Taking out a lifetime mortgage could affect your entitlement for means-tested benefits.
  • You can make some overpayments over the life of the mortgage without penalty, but early repayment charges may be payable if you want to repay more or repay the mortgage in full.  These do not apply on death or moving into long term care.

Eligibilty criteria

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:

  • applicants must be aged between 55-85
  • applying for a single or joint application (maximum age limit only applies to younger applicant)
  • the lifetime mortgage must be on your main residence
  • the property is in England, Scotland or Wales
  • applicants already own the property
  • want to borrow at least £30,000.

Find out if you can apply for a Scottish Widows Bank Lifetime Mortgage by using our Lifetime Mortgage Checker.

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 give us a call.

Lifetime mortgage FAQs

  • 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 five years of having your mortgage, you’re able to repay your loan in full without incurring an Early Repayment Charge.