Martin Lewis generally views lifetime mortgages (a form of equity release) as an expensive, last-resort option for homeowners over 55 to unlock property wealth, warning that compound interest can rapidly erode inheritance. While acknowledging they are safer now, he advises considering alternatives like downsizing first, only borrowing what is necessary, and ensuring the provider is Equity Release Council registered.
The Money Saving Expert Martin Lewis explains an equity release lifetime mortgage lets you access the money tied up in your home, with optional repayments allowed to pay funds back and avoid the interest compounding.
The top 10 lifetime mortgage providers include Aviva, Royal London, Liverpool Victoria, Legal & General, More 2 Life, Canada Life, Just (formerly Just Retirement), Livemore & Pure Retirement. These are a list of the best providers.
The lowest Equity Release interest rate is currently 6.24% (MER) fixed for life. The highest interest rate in the market is 9.56% (MER). In the 2024 Q3 market data, the Equity Release Council stated that average advertised lifetime mortgage rate was 6.89% in October 2024.
A Lifetime Mortgage is not suitable for everyone and may affect your entitlement to means-tested benefits, so it is important to seek financial advice before taking any action. If you are considering releasing equity from your home, you should consider all options available before equity release.
Does Martin Lewis recommend equity release? Martin Lewis neither recommends nor disregards equity release as a good option. Mainly this is because he is not a qualified equity release advisor, so he cannot give specific advice to individuals.
Yes – if you take out a lifetime mortgage, a type of equity release, you can pay back some or all of it early. But lifetime mortgages are long-term products, so that's usually not the best option. You'll probably have to pay an early repayment charge (ERC), which can be very high.
Lifetime Mortgages
What are the age limits for a lifetime mortgage? Lifetime mortgages are available to borrowers aged 55 and above. There are no upper age limits for lifetime mortgages. At age 55 you can release up to 28.65% of your property value, increasing each year you age.
Martin: "But people with LISAs now are very worried. I'm getting people saying, 'should I take my money out of a LISA right now because of this?' . Chancellor, I could do with your help, so that they have some legitimate expectation of what's going to happen."
A reverse mortgage, also known as a home equity conversion mortgage (HECM), is the most common mortgage taken out by seniors: Backed by the FHA, it allows homeowners 62 and older to borrow against their home's value.
Key facts about lifetime mortgages
Offers flexible payment options (including the option to pay nothing). If you choose to pay nothing, monthly interest is 'rolled up' and added to the loan. The loan is paid back by selling the property when the last borrower dies or goes into long-term care.
Good news: There is no maximum age limit for applying for any mortgage—including a 30-year mortgage. In fact, lenders cannot discriminate based on age due to regulations such as the Equal Credit Opportunity Act. This means that older adults in their 70s, 80s or beyond can apply for—and obtain—a 30-year mortgage.
A lifetime mortgage is a type of equity release, a loan secured against your home that allows you to release tax-free cash without needing to move out.
Another option is a Retirement Interest Only mortgage (commonly referred to as a RIO). RIO mortgages have no fixed term; instead, they can run for the rest of your life. And you are only required to make monthly interest payments to keep the capital owed level.
With a lifetime mortgage, the amount you can borrow is typically a percentage of your home's value, generally ranging from around 29.6% to 58.4%. This percentage varies based on your age and the specific terms offered by the lender. Ready to explore your options further?
Typically, you must be over 55 to apply for a lifetime mortgage. The property will need to be your main home and there may be other rules, such as the residence will need to be reasonably maintained. Providers usually also state that the property must be insured.
The great news is that nothing is further from the truth – lifetime mortgages allow you to move home after you've taken out a plan, and transfer the mortgage across to it. This process is called porting, and has been a common feature on lifetime mortgages for some time.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.