Lifetime mortgage referrals

Equity release lifetime mortgages and how they could work for your clients

What is a lifetime mortgage and does my client qualify?

A lifetime mortgage is a type of equity release and is a loan secured against your home. It allows homeowners aged 55 or over to release tax-free funds tied up in their homes. To be eligible for a lifetime mortgage, your client must:

The amount that your clients can borrow will depends on their age, and the value of the property. The minimum a release amount available is £10,000.

When you refer a client to us, we’ll calculate exactly how much they could release to meet their objectives and recommend the right lifetime mortgage for them as part of our advice process. We’ll investigate how much (if any) of the loan interest they can afford to pay and only recommend a lifetime mortgage if it’s right for them. We always put the needs of your client first.

How could a lifetime mortgage work for my client?

When you refer a lifetime mortgage, your client has two options as to how they can release their cash:

Lump sum lifetime mortgage

With a lump sum lifetime mortgage your client receives the cash as a lump sum at the start of the lifetime mortgage. It’s ideal if your client is seeking a cash lump sum for specific reason such as repaying an interest only mortgage or other debts or a large home improvement project such as future proofing the home for later life. The interest builds up on the full amount from day one.

Drawdown lifetime mortgage

A drawdown lifetime mortgage comes with an initial cash release amount followed by smaller amounts as your client needs them. This could save them thousands in interest if they don’t need all the money straight away as your client will only accrue interest on the taken part of the loan. Any further drawdown releases are subject to interest at the prevailing rate.

Lifetime mortgage product features

All lifetime mortgage products the we recommend meet standards that the Equity Release Council has set to protect clients. You can guarantee that:

Clients will retain full home ownership throughout the loan.

Clients have the option to make repayments if they wish

The amount owed will never be higher than the homes value

The loan can be re-mortgaged like a standard mortgage

A lifetime mortgage is a loan secured against the home and subject to compound interest, meaning the amount the amount owed can grow quickly. Equity release will reduce the value of your clients estate and may affect their entitlement to means-tested benefits. Equity release may leave your clients with limited or no property equity remaining. A lifetime mortgage is a long-term financial product and is not designed to be fully repaid until the death or entry into long-term care of the last remaining borrower, otherwise early repayment charges may apply

Which option suits your client best?

Our Later Life Lending Navigator Tool can help you stay on the right side of regulatory changes whilst providing great outcomes for your clients – and, deliver a straightforward way of generating an additional revenue stream into your business this year. It provides a simple way to triage a customer based on their affordability and needs.

Developed by advisers and reviewed by industry stakeholders, our brand-new tool helps you assess and record the suitability of your clients’ different later life lending options, including RIOs, residential, lifetime mortgages and payment term lifetime mortgages, to ensure the product, and advice journey, you recommend is the right one.