Getting an Enhanced Lifetime Mortgage

Lifetime mortgages allow you to release equity from your home without having to sell or downsize, providing a practical way to boost your finances in retirement. But did you know that certain health or lifestyle conditions could make you eligible for a higher loan amount or a lower interest rate?

This guide covers everything you need to know about enhanced lifetime mortgages – what they are, who qualifies, how much you could borrow, and how a specialist advisor can help you find the best deal.

What is an enhanced lifetime mortgage?

Enhanced lifetime mortgages are a type of equity release scheme which allows qualifying borrowers to benefit from a lower interest rate or higher loan-to-value (LTV), depending on the lender. This means you could raise more capital than with a standard deal.

Securing a lower rate could safeguard a higher percentage of your property’s value to pass on to loved ones, as the eventual interest payment would be lower. Remember that you won’t usually be able to do both.

Enhanced lifetime mortgages are based on the assumption that the lender will get their capital back quicker if you have certain health or lifestyle conditions that affect your life expectancy. There’ll be more certainty over the property’s future value. So they’ll be willing to offer you a higher amount or more favourable terms in the interim.

A specialist broker can help determine whether you qualify for enhanced equity release and whether it is the best course of action.

Who is an enhanced lifetime mortgage best suited for?

An enhanced lifetime mortgage is designed for homeowners who may qualify for a higher loan-to-value (LTV) ratio or a lower interest rate due to specific health or lifestyle conditions. But is it the right choice for you?

You may benefit from an enhanced lifetime mortgage if:

• You are 55 or older and own a property that meets lender criteria
• You have a qualifying health condition or lifestyle factor (e.g., high blood pressure, diabetes, or a history of smoking)
• You need to access more equity than a standard lifetime mortgage would allow
• You want to improve your financial flexibility in retirement – whether to supplement income, fund home modifications, or help family members
• You don’t want to downsize but still need additional funds

For those who qualify, an enhanced lifetime mortgage could provide more financial freedom, whether that means covering medical costs, home renovations, or simply enjoying a more comfortable retirement.

A specialist equity release advisor can help determine if you’re eligible and find the best deal for your situation.

How much can you borrow?

Although your age and the value of your property will always factor in, the amount you can borrow will depend on the lender’s LTV ratio – and the severity of your health condition will heavily influence this.

Enhanced lifetime mortgages can offer the chance to secure LTVs around 50% and beyond, much higher than standard equity release deals.

Those with the poorest health will qualify for the highest LTVs and, therefore, the largest payments. For this reason, it’s important to be thorough when filling out the lender’s health and lifestyle questionnaire.

Just bear in mind that if you secure a higher LTV and are able to borrow more, you may end up paying more in interest. An enhanced lifetime mortgage advisor will help you decide whether the additional equity released will be worth the cost.

How to get an enhanced lifetime mortgage

If you’re interested in an enhanced lifetime mortgage, there are some simple steps you can take to make the process much smoother. We recommend following these steps.

Step one: Speak to a broker

An equity release broker can help you decide if an enhanced lifetime mortgage is right for you and, if so, what you should do next.

They’ll help collate the relevant documentation you could need and will make sure you understand the potential risks involved, such as leaving less behind as an inheritance.

They often recommend talking with your beneficiaries so everyone is happy with the plan.

Step two: Check if you qualify

Although the eligibility criteria can vary according to the lender, we will discuss them below. You need to make sure that you qualify for an enhanced lifetime deal.

Typically, this will mean you need a health or lifestyle factor that puts you at greater risk of a lower life expectancy, such as a serious illness, smoking, high blood pressure or heart disease. Your broker will be able to help you determine if you qualify.

Step three: Find the right lender and apply

There aren’t many lenders operating in the enhanced space, which is why a mortgage broker can be invaluable – they’ll know which ones to approach based on your circumstances, saving you a lot of time and energy.

Once you’ve found the lender to suit you, it’s time to apply. The application process will involve medical underwriting, and you’ll be asked to complete a simple health and lifestyle questionnaire. If the lender needs more information, you may be asked to provide a full doctor’s report.

The usual mortgage process will also apply in that you’ll need a solicitor, and the lender will require a property valuation, with various fees you have to pay, too. Your broker will be able to discuss this with you and guide you accordingly.

If you get in touch, we’ll arrange for an equity release specialist with experience dealing with enhanced lifetime mortgages to contact you directly for a free, no-obligation chat.

How does an enhanced lifetime mortgage compare to other equity release options?

If you’re considering releasing equity from your home, it’s important to understand how an enhanced lifetime mortgage differs from other equity release products. The best choice for you will depend on your health status, borrowing needs, and long-term financial goals.

Below is a comparison of enhanced lifetime mortgages, standard lifetime mortgages, and retirement interest-only (RIO) mortgages to help you decide.

Eligibility criteria

Eligibility criteria can vary between providers, but the general idea is the same – you need to have certain lifestyle or health conditions that could limit your life expectancy.

What illnesses are covered?

Typical medical conditions that could enhance your lifetime mortgage are:

• Hypertension (high blood pressure)
• Diabetes
• Heart attack
• Stroke
• Cancer
• Multiple sclerosis
• Parkinson’s disease
• Dementia
• Kidney failure
• Liver disease
• Motor neuron disease
• HIV

This list can vary depending on the lender you choose, and they may have different limitations as well. In the case of cancer, for example, some may expect you to have been diagnosed in the last five years, and others may widen their criteria to include anyone who’s been advised by a medical professional to take early retirement due to ill health (though there may be some exclusions involved).

What lifestyle conditions are included?

The two key lifestyle conditions that could make you eligible are smoking and having a high body mass index (BMI), typically over 41.

Lenders may have different limits or restrictions on this – for example, you may need to have been smoking at least 10 cigarettes a day for the last 10 years to be classed as a smoker – and you may need to combine these lifestyle factors with other health conditions in order to qualify for enhanced rates.

What about standard eligibility criteria?

You’ll need to meet standard lifetime mortgage criteria as well, such as being aged 55+ and owning a home worth at least the lender’s minimum amount – usually around £70,000, but it can be more – and you should ideally be mortgage-free or only have a small balance remaining.

If it’s the latter, you may be expected to clear the balance with the proceeds of equity release.

Things to consider

Knowing whether to opt for equity release with an enhanced lifetime mortgage isn’t always straightforward, so here are a few risks and benefits to help you decide.

Benefits

• Being eligible for a larger payment means having more capital to enjoy your retirement.
• You may be able to use some of the proceeds to modify your home to adapt to your changing health.
• If you opt for a lower interest rate, your interest payment will be lower.
• You’ll still have a negative equity guarantee, meaning your beneficiaries won’t face any debt.
• Determining your eligibility is straightforward and you won’t normally need to undergo a medical.

Risks

• Enhancing the amount you can borrow can sometimes result in higher interest rates, leading to higher costs overall.
• You’ll likely leave less behind to your loved ones.
• The application process can take longer, particularly if you need to provide a doctor’s report.
• If you take a lump sum, it can impact means-tested benefits.
• You may have to pay early repayment charges if you change your mind.

What are the alternatives?

If you’re not sure an enhanced lifetime mortgage is right for you, several other options exist. The first is downsizing, which allows you to free up some equity by moving to a smaller and lower-value property.

This could give you the bonus of an easier-to-maintain house, a definite plus if you’re struggling with various health conditions.

Other options could include taking out a retirement interest-only mortgage or a different form of borrowing entirely. You could also see what benefits you may be entitled to or if any grants are available through your local authority (some may be able to offer grants to help with property modifications, for example).

Of course, if you don’t have any qualifying medical or lifestyle conditions, you can always opt for a standard lifetime mortgage. Just remember to fill in any health questionnaire accurately, and honestly, so you know the full picture of what you could be eligible for.

Get matched with an enhanced lifetime mortgage specialist

Ready to find an enhanced lifetime mortgage? Speaking to an expert broker is essential, and we can help you find the specialist advice you need with our unique broker-matching service.

Just tell us a few details, and we’ll find the broker to suit. With plenty of advisors in our network who specialise in this sector, you’ll soon have the right expertise on your side. Call [phone]_number] or fill in this form to get started with a free, no-obligation chat.