I’m sure you will agree that when it comes to a better understanding of what the best lifetime mortgage rates are, it can get confusing.
Luckily, we are here to provide you with useful information on some of the best lifetime mortgage providers and highlight some of the best lifetime mortgage rates.
The key topics in this guide will help explain lifetime mortgages to you in a straightforward way. In this guide, you will find:
Equity release schemes are rapidly growing in prevalence in the UK and overseas – and with good reason.
Unfortunately, more and more people are finding they have left it too late to prepare for the cost of long-term care in later life. As a result, equity release is understandably becoming an increasingly popular option.
The two most popular options are lifetime mortgages or home reversion plans. These can provide you with a retirement income or cash reserve, for financial security in old age.
So, what are lifetime mortgages? A lifetime mortgage is the most popular type of equity release scheme, as it’s the most flexible and versatile option. It provides instant access to a loan that can be used to pay for long-term care in later life. The amount you receive depends on your property value.
But as customers’ needs continue to diversify, new products emerge to meet them. We recommend seeking advice from money experts or advisors, to ensure you make an informed lifetime mortgage comparison and choose the right equity release plan for you.
Many lifetime mortgages offer a ‘negative equity guarantee’, ensuring you won’t have to pay back more than the loan amount you received when you eventually come to sell your property.
Any equity release provider that wants to be part of the Equity Release Council has to offer a negative equity guarantee, as part of their equity release plan.
It’s easiest to think of a mortgage as a kind of long-term loan, secured against the value of your property. Also, the mortgage is not repayable until you either die or move.
To be eligible, you must own your home and be over the age of 55. The property value of your home must be at least £70,000. You must also have a bank account for payment to be made into.
There is no maximum age for a lifetime mortgage. However, you should seek advice from an advisor to check specific eligibility criteria.
The difference with equity release rates and regular mortgages or loans is that, although the lender adds interest (usually annually no repayments are due until the termination of the contract. The equity release plan terminates upon death or the sale of the property.
As with all investment options, there are benefits and drawbacks to consider if you are thinking about approaching one of the best lifetime mortgage providers. You can see some of the top companies for lifelong mortgages below.
Here is a short video on how Lifetime Mortgages work.
The table below shows you some of the best equity release rates, as at November 2023, for lifetime mortgages, from some of the leading equity release providers in the UK.
These rates may have changed since this table was updated and should be taken as indicative only. There may also be other providers not listed on this table that could offer better deals. In addition, the providers and products noted below may not be right for your particular circumstances. Therefore, we strongly recommend that you speak to an equity release adviser, who will be able to provide you with information on the latest rates, that are applicable to you.
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| Product Name | Interest Rate | Type of product | Offers |
|---|---|---|---|
| Just For You – J2.5 | 6.22% | Fixed | Free ValuationNo application fee |
| Just For You – J1 | 6.30% | Fixed | Free ValuationNo application fee |
| Premier Flexible Pearl | 6.43% | Fixed | Free Valuation |
| Premier Optional Payment Pearl | 6.43% | Fixed | Free Valuation |
| Horizon 240 Drawdown | 6.43% | Fixed | Free Valuation |
| Classic Drawdown Super Lite 2 | 6.47% | Fixed | Free Valuation |
| Horizon 260 Drawdown | 6.47% | Fixed | Free Valuation |
| Classic Elite Drawdown Super Lite 2 | 6.47% | Fixed | Free Valuation |
| Premier Flexible Pearl | 6.48% | Fixed | Free Valuation |
| Premier Optional Payment Pearl | 6.48% | Fixed | Free Valuation |
| Horizon 240 Drawdown Fee Free | 6.49% | Fixed | Free ValuationNo application fee |
| Classic Drawdown Super Lite 1 | 6.52% | Fixed | Free ValuationNo application fee |
| Premier Flexible Pearl | 6.52% | Fixed | Free Valuation |
| Premier Optional Payment Pearl | 6.52% | Fixed | Free Valuation |
| Classic Elite Drawdown Super Lite 1 | 6.52% | Fixed | Free ValuationNo application fee |
| Flexible Pearl | 6.53% | Fixed | Free Valuation |
| Optional Payment Pearl | 6.53% | Fixed | Free Valuation |
| Enhanced Lifestyle Flexible Option | 6.53% | Fixed | Free ValuationNo application fee |
| Horizon 260 Drawdown Fee Free | 6.55% | Fixed | Free ValuationNo application fee |
The equity release rates have been sourced from Equity Release Supermarket. These indicative rates and incentives may have changed since this article was last updated. Therefore, they should only be taken as a guide and we cannot guarantee their current accuracy. Please also note that we do not provide advice on or endorse any particular product listed here. The rate you are offered will depend on your individual circumstances and subject to lender approval. We recommend that you speak to an equity release advisor to see what the best options are for you.
If you take out a product with Age Partnership, we will receive a fee for introducing you to them. By contacting Age Partnership through us, the cost of any equity release product would be the same as if you had contacted them directly. The fee we received is used to help keep our site operational and to produce new content.
Call Boon Brokers on 0333 567 1607 to discuss your equity release requirements.
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All equity release and mortgage advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
Your loan amount will depend on your property value. Therefore, you will need to get a home valuation to find out exactly how much you might expect to borrow.
The amount you can borrow also depends on your age. Those who take out plans in later life can typically borrow a higher percentage of their property value.
The lending rate that you get will typically depend on the amount of money or loan to value (LTV) you are taking. Historically, you would see figures starting around 3% and going up to about 7%, although this depends on interest rates when taking out a product.
Please see the table on this page for an idea of what approximate interest rates currently are.
When selecting a lifetime mortgage provider, comparing the best lifetime mortgage rates with the current average interest rates is essential.
Most providers of lifetime mortgages will offer various products, including fixed interest rate lifetime mortgages, variable rate lifetime mortgages, and enhanced lifetime mortgages.
It is crucial to comprehend how interest rates, such as fixed or variable rates, can affect your overall costs and the amount of money released from your home.
Here is a list of some providers that offer Lifetime mortgages in the UK>
These are some of the leading equity release providers in the UK, but there are others too. It’s important to research and compare different providers and products, and to seek advice from a qualified professional before making a decision.
Equity release can be a complex and important decision, and it’s important to understand the risks and benefits associated with different providers and products.
The interest rate on a lifetime mortgage depends on variables such as the initial loan amount, your personal situation, and market conditions. Lifetime mortgage interest rates can be fixed or variable.
Interest on a lifetime mortgage is typically computed using compound interest, with either an annual equivalent rate (AER) or a monthly equivalent rate (MER). Utilise a free equity release calculator to determine the amount of equity released and the average interest rate that will accrue over time.
As individual needs and financial situations vary, lifetime mortgages are not suitable for everyone. Existing mortgage debt, age, pension credit, and means-tested benefits eligibility can impact the suitability of lifetime mortgages.
Higher equity release interest rates will result in more accrued interest and an increase in the total debt. Consult a financial advisor to determine if a lifetime mortgage suits your circumstances.
If you wish to keep your property in the family, this option allows you to do so. This might be the case if you or your family plan to live in your home indefinitely. You can also sell your home early should your circumstances change.
The money borrowed can be spent (or reinvested) however you choose, giving you freedom and flexibility.
Many lifetime mortgage providers offer a ‘negative equity guarantee’, ensuring that you won’t have to pay back more than you received when you eventually come to sell your property.
Some lenders also allow you to portion and protect a percentage of the property’s value to gift as inheritance, or make partial repayments early should your circumstances change. This means you can ensure your family receives some inheritance from your home.
Some lifetime mortgages will allow you to repay some of your debt early. This will increase the amount that may be available to your family when you pass on.
Equity release schemes and lifetime mortgages, in particular, will likely reduce the amount of inheritance you can gift to family members and friends.
However, this is less of a concern if the overall cost of imminent care needs is likely to reduce the amount you can leave when you pass away. We recommend seeking independent advice so that you make the best decision based on your circumstances.
A lifetime mortgage can affect your entitlement to certain state benefit payments and your tax position – so it’s worth obtaining a clear picture of how enrolling on a scheme could affect your income support before making a decision.
Lifetime mortgages accrue interest on the mortgage itself and the interest added each year.
This significantly increases the amount you’ll have to repay later down the line. (Interest only lifetime mortgages can be taken out to alleviate this – as detailed below).
You may need permission or be forced to make repayment early should you decide to rent out your property or sell it before the agreed time has elapsed.
Therefore, if you do change your mind, or find that your circumstances change, things can become rather complicated.
Primarily, there are two different types of mortgages that you can choose between:
This is where you get a lump sum at the start of your equity release plan, or you are paid a regular amount over a period of time.
You are then charged interest on the borrowed amount, which is added to the loan. The effect of this is that you don’t have to make any regular repayments back to the mortgage provider.
The amount that you initially borrowed plus the rolled-up interest is repaid at the end of your mortgage term when your home is sold.
This is where you get a lump sum and make either monthly or ad-hoc payments to cover the cost of the interest on the amount borrowed.
This reduces or stops, the impact of interest building or ‘rolling-up’.
Also, some mortgages allow you to pay off the capital as well. The amount you borrowed is repaid when your home is sold at the end of your mortgage term, minus any repayments already made.
A range of alternatives to lifetime mortgage products are available, increasing the potential for complications and confusion as you decide.
Each has benefits and drawbacks of its own – but many have been developed to circumvent or alleviate problems run into by traditional standalone policies.
One such example is the ‘interest-only lifetime mortgage’. This prevents the need for a huge repayment inclusive of interest on termination of the contract. By making low monthly repayments that cover interest accrued you have less to repay when your home is sold.
An interest-only amount calculated on a lifetime mortgage also helps homeowners to protect a greater portion of their property for inheritance purposes.
Another type of scheme, known as a ‘home reversion plan’ has additional benefits for those looking to retain residence in their property long-term.
Like with many financial products, setting up a mortgage often involves costs. Also, there may be other insurance and products that you need to purchase as part of your agreement.
In our experience, these extra fees and costs typically add up to somewhere between £1,000 and £10,000. However, the price often depends on the amount you want to borrow and what additional fees your provider wants to charge.
Typically, the following costs may apply:
However, you should note that if you look to pay off your mortgage earlier than you originally agreed, you may be liable to pay an ‘early repayment charge’.
The Equity Release Council are the industry body for the equity release industry in the UK. Any equity release plans that their members offer must have a ‘no-negative equity guarantee’.
Essentially, this means that you will only owe what the house is worth when you use a lifetime mortgage.
This is really important because, in the main, people don’t repay the loan until the property is sold, which happens when you either pass on or move into a care home.
When this happens, the provider that you took the lifetime mortgage out with will calculate how much is owed from when you took out the loan until the point a repayment is due. They do this by adding on all the interest owed in the intervening years.
If the calculation from the mortgage provider shows that you owe more than your home is worth when it’s sold on the open market, the mortgage provider isn’t able to try and get any more money from your estate. This is where the ‘no-negative equity guarantee’ kicks in.
In this circumstance, when the property is sold, the entire proceeds of the sale will be paid across to the mortgage lender. Clearly, this also means that you will have nothing left to pass on to your family.
If you’re worried about the interest on Equity Release Mortgages and want to guarantee that you have something to pass on to your family, you always have the option to not ‘roll-up’ the interest.
This means that you can look to structure your loan like an interest-only mortgage, and opt to make interest payments throughout the life of the loan. This allows you to keep the outstanding balance fixed rather than seeing it escalate with the interest amount rolled up.
We recommend you watch this really useful video from the government’s Money Advice Service where individuals talk about the benefits of taking independent financial advice.
Equity release schemes allow you to retain ownership of your home and, in most cases, continue living in your home. Some people won’t be eligible for certain types of equity release schemes due to the lending criteria.
For others, they may not be the best option. For example, you may prefer to sell your property and move to sheltered accommodation, using the funds raised from downsizing to pay for additional care needs.
Or, you could choose to hold your property in trust. If you are still paying the original mortgage on your home it will need to be paid off in full before you can apply for an equity release scheme.
When you die or move into care, the debts (loan amount and any interest) must be repaid to the lending company. As a result, your family’s inheritance will likely be reduced. Often, there are also extra costs and fees to pay. These might include fees for home valuations, or legal fees.
If you’re worried about the interest on Equity Release Mortgages and want to guarantee that you have something to pass on to your family, you always have the option to not ‘roll-up’ the interest.
This means that you can look to structure your loan like an interest-only mortgage, and opt to make interest payments throughout the life of the loan. This allows you to keep the outstanding balance fixed rather than seeing it escalate as the interest amount rolls up.
When you die, only the fixed outstanding balance needs to be repaid. This is paid off using the profits from the sale of your home. Any remaining money from the sale can then be passed on to your family.
Many people looking to take out a lifetime mortgage will do so for the first time. This is why we have set out some questions you should ask when speaking to an equity release advisor.
The market for lifetime mortgages is not as large as your typical mortgage market. This is because there is more demand for conventional mortgages and fewer providers for lifetime mortgages. However, the best lifetime mortgage providers in the market are:
Because the market for these types of mortgages is much smaller, we can not stress enough the importance of speaking to an advisor.
Here is a video from Martin Lewis on ‘This Morning’ explaining why you should speak to a specialist before taking on a plan.
In the video, he says that Equity release, or lifetime mortgages, are when “you get a mortgage on the house that will be paid off when you die. So you are not repaying it month to month”.
The majority of lifetime mortgages offer early payoff options, allowing you to pay off the loan before the end of the term. However, early repayment fees may apply based on your mortgage provider and plan.
These fees are typically tied to equity release interest rates and can vary based on the type of interest rate (variable or fixed) and the remaining loan term. It is crucial to review the terms and conditions of a lifetime mortgage plan before taking it out to understand the implications of early repayments and any additional fees.
Most lifetime mortgages can be transferred to a new property, provided the new property meets the lender’s requirements.
However, your mortgage rates and the amount of money released may change due to variations in property value or market conditions. Consult your lender or a financial advisor to comprehend the ramifications of transferring your lifetime mortgage and its effect on your interest rates.
Changes in the economy and interest rate environment can result in fluctuations in fixed and variable mortgage rates, significantly impacting market conditions. Borrowers should routinely review their mortgage interest rates and consider the impact of market conditions on equity release interest rates.
You must discuss your concerns with a financial advisor who can guide on mitigating the risks associated with market conditions and lifetime mortgage rates.
Joint lifetime mortgages allow both partners to secure a loan against their home. The age of the youngest borrower and the amount of equity released determine the interest rates on joint lifetime mortgages.
Couples should consider the impact of potential changes in personal circumstances, such as a partner’s death or entry into long-term care, on their lifetime mortgage interest rates, rates and accumulated interest. A financial advisor can assist couples in comprehending the effects of interest rates and other variables on their joint lifetime mortgage.
What role does a financial adviser play in choosing a lifetime mortgage, and how can they help navigate the complexities of interest rates and other factors?
A financial adviser plays a crucial role in selecting a lifetime mortgage. They can provide expert guidance on various aspects, such as interest rates, early repayment fees, and closing costs.
Financial advisors can help you comprehend the distinctions between fixed and variable interest rate lifetime mortgages, the operation of compound interest, and the impact of market conditions on your lifetime mortgage rates.
In addition, they can assist you in evaluating drawdown lifetime mortgages, flexible lifetime mortgage options, and lump sum loan products to identify the most appropriate solution based on your personal circumstances and financial objectives.
In addition, financial advisors can help you assess the potential impact of home equity withdrawal on means-tested benefits, inheritance protection, and pension credits.
By working with a financial advisor, you can make well-informed decisions regarding your lifetime mortgage and ensure that you select the product with the best mortgage interest rates and features for your specific needs.
The interest rate on a lifetime mortgage is the interest rate charged on the amount borrowed through a lifetime mortgage. Due to the longer term of the loan and the fact that interest is typically rolled up and added to the loan, the interest rate may be variable or fixed and may be higher than standard mortgage rates.
To compare lifetime mortgage rates, you can examine the representative APR (annual percentage rate) offered by various lenders, including the interest rate and any product-related fees and charges. It is essential to compare the APRs of multiple providers and products and to seek the counsel of a qualified expert to comprehend the costs and benefits of each option fully.
Various factors, such as the age and health of the borrower, the property’s value, and the loan-to-value (LTV) ratio, can influence lifetime mortgage rates. Providers may also consider the borrower’s credit history and income when setting interest rates.
Consider various factors, such as the provider’s reputation, experience, product features, fees and charges, and customer service, when selecting the best lifetime mortgage lender. It is essential to compare different providers and products and to seek advice from a qualified professional who can assist you in understanding your options and selecting the most appropriate provider for your needs. It is also essential to consider the potential risks and benefits of equity release and make an informed decision regarding its suitability.
The adverts for Boon Brokers on this page have been signed off as a Financial Promotion by Boon Brokers Limited, to ensure that they are in compliance with Section 21 of FSMA. Boon Brokers Limited is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
In this article, we answer 22 important questions that you may have about equity release, including what it is, how it works and what the best interest rate deals are.
Equity Release is not for everyone. In this article we look at the alternative options that you can consider if you need access to money in later life to pay for care, top up your pension etc.
A lifetime mortgage is the most popular type of equity release scheme, as it’s the most flexible and versatile option. The amount you receive depends on your property value.
In recent years equity release has become a very popular option. This article looks at the pros and pitfalls of equity release and what you need to consider before taking it out.
How much you can borrow from equity release varies depending on your age and house value. In this article we look at how much you could borrow from your home.
A drawdown mortgage is a type of equity release scheme, offering greater flexibility and freedom compared with traditional plans. In this article we explain all that you need to know.
An equity release calculator will give you a good indication of what you can borrow from your home. This article explains how the calculator works and also shows you what you can receive.
One of the big concerns that people have about equity release is what happens to their home and borrowings when they die. In this article we explain everything you need to know.
A home reversion plan is primarily suited to individuals over 65 looking for a solution to their finances. This article explains all you need to know.
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Unlike most equity release advisors, Boon Brokers do not charge any fees! Have a free consultation to see how they can help.
You can speak to Boon Brokers on the number below and discuss your options
0333 567 1607
Use the equity release calculator and see how much money you could receive.
You can book a call back from for an equity release specialist, who can call you when it's conveniant
All equity release advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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