What is the maximum age for a lifetime mortgage?

Over 99% of equity release plans recommended are lifetime mortgages, making them a popular way for homeowners to access the value in their property. A common misconception, however, is that there is a strict maximum age for a lifetime mortgage, when in fact, many lenders do not have an upper age limit at all.

Quick Summary

There is no universal maximum age for a lifetime mortgage, but individual lenders may set their own upper limits, typically ranging from 85 to 100 years. The minimum age is consistently 55 across most providers. Your age impacts how much you can borrow, with older applicants generally able to release a higher percentage of their home's value.

Key Points

• No Universal Maximum Age: While the minimum age for a lifetime mortgage is typically 55, many lenders do not enforce a maximum age.

• Lender Criteria Vary: Individual providers set their own maximum age limits, which can range from no cap at all to limits of 90 or 100.

• Older Applicants May Borrow More: As you get older, the percentage of your property's value you can borrow typically increases.

• Impact on Inheritance: Taking out a lifetime mortgage will reduce the value of your estate, although some products offer an inheritance protection guarantee.

• Alternatives Exist: If you need funds but are not eligible for a lifetime mortgage, alternatives such as a Retirement Interest-Only (RIO) mortgage or downsizing may be suitable.

• Compound Interest Risk: For interest roll-up mortgages, the debt can grow quickly due to compound interest, especially if taken out at a younger age.

• Financial Advice is Essential: Consulting an independent financial advisor is vital to navigate the options and understand the specific criteria and consequences.

No universal maximum age

Many people assume there is an upper age limit for a lifetime mortgage, but this is a myth. While the minimum eligibility age is 55 for most products, many providers have no maximum age for applicants. However, some lenders do impose their own maximum age restrictions, so it is crucial to research different providers and their specific criteria before applying.

How age affects your borrowing amount

One of the most significant ways your age influences a lifetime mortgage is the amount of equity you can release from your property. The older you are when you apply, the more cash you can typically borrow. This is because the loan is repaid when the last borrower dies or moves into long-term care, and lenders can predict a shorter life expectancy for older applicants.

Lender-specific age limits

While many providers have no upper age limit, criteria vary significantly between lenders. Professional advice is vital for comparing options based on your age and circumstances. Examples of lender age limits include:

• Aviva: Minimum age 55, no upper limit.
• Canada Life: Minimum age 55, maximum age 90.
• Hodge: Minimum age 55, maximum age 88.
• OneFamily: Minimum age 55, maximum age 100.
• Legal & General: Minimum age 55 (50 for some products), with upper limits up to 90 for their calculator, though they offer mortgages to 95+ based on sustained income.
• LiveMore: Minimum age 55, no upper limit.
• More2Life: Minimum age 55, maximum age 95.

Different types of lifetime mortgages

Understanding the different products available is key to finding the right solution. Lifetime mortgages offer different ways to release equity, each with its own features.

• Lump Sum Lifetime Mortgage: A one-off cash payment where interest compounds.
• Drawdown Lifetime Mortgage: Allows an initial lump sum and a reserve facility; interest is only charged on the money released.
• Interest-Paying Lifetime Mortgage: Option to pay off some or all interest monthly to manage debt growth.
• Enhanced Lifetime Mortgage: For those with qualifying health conditions; may offer a larger loan or better rate.
• Payment Term Lifetime Mortgage: Available from age 50, requires interest payments for a set term.

Comparison: Lifetime Mortgages vs. Other Equity Release Options

The table below outlines key differences between Lifetime Mortgages and other equity release options like Retirement Interest-Only (RIO) Mortgages and Home Reversion Plans. For example, with a Lifetime Mortgage, you retain 100% ownership and payments are not mandatory. In contrast, RIO mortgages require mandatory monthly interest payments, and Home Reversion Plans involve selling a percentage of your home. The full table can be found on {Link: moneyrelease.co.uk https://www.moneyrelease.co.uk/Types-Of-Equity-Release/}.

Conclusion

There is no single maximum age for a lifetime mortgage; it depends on the specific lender. While the minimum entry age is standard at 55, many providers have no upper age limit. Your age is a crucial factor, influencing the amount of equity you can release, with older applicants often able to borrow more. Comparing lenders is essential, and potential borrowers should always seek independent financial advice to determine the most suitable product.

Frequently Asked Questions

Can I get a lifetime mortgage if I am over 80?

Yes, many lenders offer lifetime mortgages to people over 80. Some providers have no upper age limit, while others cap applications in the mid-80s to mid-90s.

Is there a minimum age for a lifetime mortgage?

The standard minimum age for a lifetime mortgage is 55, though some specific products, like certain Payment Term Lifetime Mortgages, can be available to those aged 50 or over.

How does my age affect the amount I can borrow?

The older you are, the more you can typically borrow. This is because the loan is paid back when you die or move into long-term care, and lenders account for a shorter repayment term.

What if I have a joint application with a younger partner?

For a joint application, most lenders will base the eligibility criteria and borrowing amount on the age of the youngest applicant. If one partner is under 55, they may need to be removed from the property deeds.

Are there lifetime mortgages with no maximum age limit?

Yes, several major lenders, such as Aviva and LiveMore, offer lifetime mortgage products with no specified maximum age limit.

Can I be rejected for a lifetime mortgage due to age?

You could be rejected if you are below the minimum age of 55, or if you exceed a particular lender's specific maximum age cap. However, having a poor credit score is generally not a reason for refusal.

Does my age affect the interest rate on a lifetime mortgage?

While your age doesn't directly dictate the interest rate, it does affect the maximum loan amount available. Borrowing closer to the maximum amount can lead to a higher interest rate, so your age can indirectly influence the rate.

Can I apply for a lifetime mortgage if I am 55?

Yes, age 55 is the standard minimum age to apply for most lifetime mortgage products. However, the number of plans available and the amount you can borrow may be restricted compared to older applicants.

What is an enhanced lifetime mortgage?

An enhanced lifetime mortgage is for those with certain health conditions or a reduced life expectancy. Because of this, providers may offer more money or a lower interest rate, as the loan is likely to be repaid sooner.