We get a lot of enquiries from pensioners who want to take out a mortgage to access funds in later life, many of whom have been turned down by lenders that don\u2019t cater for homeowners at, or nearing, retirement age.\n\nThe good news is that there are plenty of options available if you're an older homeowner.\n\nIn this article we\u2019ll look at just one of the mortgage products available for pensioners: lifetime mortgages.\n\nIncluded in the article is:\n<ul>\n \t<li><a href="#what-is">What are lifetime mortgages for pensioners?<\/a><\/li>\n \t<li><a href="#lifetime-vs-equity-release">Is a lifetime pensioner mortgage the same as equity release?<\/a><\/li>\n \t<li><a href="#benefits">What are the benefits of lifetime mortgages for pensioners?<\/a><\/li>\n \t<li><a href="#eligibility">Am I eligible for a lifetime pensioner mortgage?<\/a><\/li>\n \t<li><a href="#lifetime-bad-credit">Can I get a lifetime pensioner mortgage with bad credit?<\/a><\/li>\n \t<li><a href="#how-much">How much equity can I release with a lifetime pensioner mortgage?<\/a><\/li>\n \t<li><a href="#interest-rates-lifetime">Interest rates on lifetime pensioner mortgages<\/a><\/li>\n \t<li><a href="#lifetime-right-for-you">Is a lifetime pensioner mortgage right for me?<\/a><\/li>\n \t<li><a href="#alternatives-lifetime">Alternative to lifetime pensioner mortgages<\/a><\/li>\n \t<li><a href="#lifetime-btl">Can I get a lifetime pensioner mortgage on a buy-to-let?<\/a><\/li>\n \t<li><a href="#expert-lifetime">Speak to an expert on lifetime pensioner mortgages<\/a><\/li>\n<\/ul>\nIf you'd like to skip the reading and get advice directly from one of the expert advisors we work with, call 0808 189 2301 or make a quick <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-an-equity-release-specialist\/">online enquiry<\/a>.\n\nWe'll match you with an advisor experienced in helping older customers who want to release equity from their homes. They'll be able to answer all your questions and help you find the mortgage solution to meet your needs and circumstances.\n\n[feefo-banner]\n<h2 id="what-is">What are lifetime pensioner mortgages?<\/h2>\nA lifetime pensioner mortgage is a form of <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/equity-release-mortgages\/">equity release<\/a>, which is the act of \u2018unlocking\u2019 some of the capital tied up in a property. Lifetime mortgages for pensioners take the form of a loan secured on your home or primary residence, and the equity released is made available to you as a tax-free cash sum.\n\nInterest is added to the amount that you decide to borrow and is \u2018rolled up\u2019, i.e. it accrues on a yearly basis, but does not need to be repaid until the property is sold, whether that happens when you move into residential care or pass away.\n<h2 id="lifetime-vs-equity-release">Is a lifetime pensioner mortgage the same as equity release?<\/h2>\nLifetime pensioner mortgages are a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/equity-release-mortgages\/the-different-types-of-equity-release-plans\/">type of equity release, <\/a> However, unlike other forms of equity release arrangements, you retain 100% ownership of your property after you take out the loan.\n\nThey contrast with an older form of equity release called \u2018<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/equity-release-mortgages\/home-reversion\/">home reversion plans<\/a>\u2019 which meant selling all or part of your home back to the lender in order to release funds. The borrower then becomes a tenant in their own home, and it was easier for the lender to repossess the property if it went into negative equity.\n\nLifetime pensioner mortgages are accredited by the Equity Release Council, which was set up to protect homeowners from unscrupulous lending in this area.\n<h2 id="benefits">What are the benefits?<\/h2>\nThe key benefits of a lifetime mortgage can be summarised as follows:\n<ul>\n \t<li>You own the property.<\/li>\n \t<li>No repayments due while you\u2019re living in the property.<\/li>\n \t<li>No risk of repossession.<\/li>\n \t<li>No regular income required.<\/li>\n \t<li>You get a \u2018no negative equity guarantee\u2019, which means your estate isn't liable for any costs, even if the property loses value and doesn't cover the remaining loan amount at sale.<\/li>\n<\/ul>\n<h2 id="eligibility">Who is eligible?<\/h2>\nYou may be eligible for a lifetime mortgage if the following apply to you:\n<ul>\n \t<li>You're <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/equity-release-mortgages\/equity-release-age\/">aged 55 or over.<\/a><\/li>\n \t<li>Your property is valued at \u00a375,000 or above.<\/li>\n<\/ul>\n<h2 id="how-much">How much equity can be released?<\/h2>\nThe <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/equity-release-mortgages\/how-much-equity-can-i-release\/">amount of equity you can release<\/a> will depend on lender policy as well as:\n<ol>\n \t<li>The amount of equity in your home.<\/li>\n \t<li>Your state of health.<\/li>\n \t<li>Your age.<\/li>\n<\/ol>\nThe amount of equity you can release through a lifetime pensioner mortgage will depend on your age. The older you are, the more you can borrow, for example at age 55 or 60, most lenders allow you to borrow 25%-30% of the value of your home. At 65 or 70, many allow up to 55.5%.\n\nLenders also set a minimum loan amount for lifetime mortgages: for most this is around \u00a315,000; for a few it\u2019s as high as \u00a345,000.\n\nFor example, if you\u2019re 55 years of age and your house is worth \u00a3250,000 you may be able to release around \u00a351,250 using a lifetime mortgage.\n\nAt 65, you could borrow around \u00a375,000 on a property of equal value.\n\nTo find out exactly how much you could borrow, call 0808 189 2301 or make a quick <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-an-equity-release-specialist\/">enquiry<\/a>.\n<h2 id="interest-rates-lifetime">Rates for lifetime pensioner mortgages<\/h2>\nMost lenders currently <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/lifetime-mortgages\/lifetime-mortgage-rates\/">offer interest rates<\/a> of around 5% on lifetime mortgages for pensioners. A few can go as low as 3.7% under the right circumstances.\n\nThere are both fixed and variable rates available; variable carries far more risk since interest is not usually paid off until the sale of the property and can mount up quickly, which means a much larger final amount owed by your estate if interest rates rise significantly.\n<h2>Can a poor credit history affect access to the best rates?<\/h2>\nCredit issues may not be as much of an obstacle to lifetime mortgages than they can be for normal residential mortgages, because no regular repayments are due.\n\nAlthough lenders differ in their policies around this point, many offer lifetime mortgages to homeowners with a history of <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/bad-credit-mortgages\/how-to-get-a-mortgage-with-bad-credit\/">adverse credit<\/a>.\n<h2 id="lifetime-right-for-you">Is a lifetime pensioner mortgage right for me?<\/h2>\nLifetime mortgages can be a good way to free up funds if you're asset rich but don\u2019t have a lot of cash savings to fully enjoy your retirement.\n\nSome people want the cash before they die in order to gift money to family members or make modifications to their home.\n\nHowever, they aren\u2019t the answer for everyone, and there are a few <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/equity-release-mortgages\/is-equity-release-a-good-idea-here-are-the-pitfalls-to-look-out-for\/">important issues<\/a> to keep in mind:\n<h3>Impact on your tax position<\/h3>\nWhile the lump sum you'll receive is paid to you tax-free, it could limit your access to some state benefits and it\u2019s also possible that it will be considered a tax event at some point in the future, depending on what you do with the money.\n\nSeek professional advice for clarity on this point.\n<h3>Will it impact on my legacy?<\/h3>\nTaking out a lifetime mortgage will reduce the amount of equity in your property and therefore limit the amount you are able to pass on to beneficiaries (unless the property\u2019s value increases significantly).\n\nHowever, it could also potentially reduce the amount of inheritance tax due on your estate.\n<h3>Upkeep of the property<\/h3>\nMost lenders will stipulate that the property needs to be maintained to a certain standard as a prerequisite of agreeing to a lifetime mortgage. This may not be realistic for you if you\u2019re not up to the task of managing regular upkeep.\n\nIt's also a requirement that the property is insured.\n<h2 id="alternatives-lifetime">What are the alternatives to lifetime pensioner mortgages?<\/h2>\nIf you\u2019re an older homeowner and need access to funds there are a number of <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/equity-release-mortgages\/alternatives-to-equity-release\/">alternatives to lifetime mortgages<\/a> that may apply to you depending on your situation.\n\nThese include:\n<ul>\n \t<li>Downsizing.<\/li>\n \t<li>Personal loans or credit cards (for smaller amounts).<\/li>\n \t<li>Renting out a room or part of your property.<\/li>\n \t<li>Refinancing an <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/interest-only-mortgages\/interest-only-investment\/">investment property<\/a> on interest only basis.<\/li>\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/interest-only-mortgages\/rio-mortgages\/">Retirement Interest Only mortgage (RIO).<\/a><\/li>\n \t<li>Remortgaging with a lender that <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/remortgages\/remortgaging-at-different-ages\/">accepts older homeowners.<\/a><\/li>\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/equity-release-mortgages\/the-different-types-of-equity-release-plans\/">Other forms of equity release.<\/a><\/li>\n<\/ul>\nIf you\u2019re unsure of the best solution for you, call 0808 189 2301 or make a quick online <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-an-equity-release-specialist\/">enquiry.<\/a>\n\nWe\u2019ll match you with one of the advisors we work with who has experience of helping other customers successfully arrange equity release mortgages.\n<h2 id="lifetime-btl">Can I take out a lifetime mortgage on a buy-to-let?<\/h2>\nIt\u2019s not usually possible to take out a lifetime mortgage on a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/">buy-to-let property<\/a>, as almost all lenders offer them only on main residences.\n\nAt the time of writing, only one lender offers them on buy-to-let properties, and rates are far higher.\n<h2 id="expert-lifetime">Speak to an expert on lifetime pensioner mortgages<\/h2>\nIf you have questions and want to speak to an expert for the right advice, call 0808 189 2301 or make an online <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-an-equity-release-specialist\/">enquiry<\/a>. We'll match you with one of the expert brokers we work with.\n\nAll the advisors we work with are whole-of-market brokers with access to mortgage lenders across the whole UK market. We'll match you with an advisor experienced in successfully arranging lifetime pensioner mortgages.\n\nThey'll be happy to answer all your questions and find the best mortgage for your own particular needs and circumstances.\n\nWe don\u2019t charge a fee and there\u2019s absolutely no obligation either.