Lifetime Mortgages and Home Reversions Plans for over 55s 

Caz Blake-Symes • October 27, 2017

From Independent Specialists at Bath Mortgages Online

A Lifetime Mortgage is where the provider lends you a percentage of your property’s value in the form of tax-free cash. As with a traditional mortgage you will be charged interest on the loan however, with a Lifetime Mortgage you have the option not to make any monthly repayments (although you can if you want to) and there is no set term or repayment date. If you do decide to make monthly repayments this will typically only cover the interest on the loan however, you will have the flexibility to set up the Lifetime Mortgage to repay all, some, or none of the interest over the life of the plan.

As with all Lifetime Mortgages, the loan plus interest continues until the plan comes to an end, usually when you pass away or move into long-term care. At this point the property is sold to repay the original sum borrowed, plus any interest that has accrued.

There are a number of different types of Lifetime Mortgages which we will be able to discuss with you and some of the more popular schemes are outlined below.

Lump Sum Lifetime Mortgage Plans

This type of product simply allows you to release all of the equity in one lump sum. Once the equity has been released the interest will start to accrue on the full loan amount.

Drawdown Lifetime Mortgage Plans

A Drawdown plan is similar to the Lump Sum option however you can retain a cash reserve that can be drawn down at some point in the future. Interest is only charged on the total amount you withdraw, and therefore this plan can save you a significant amount compared to a Lump Sum plan.

Enhanced Plans

If you or your partner have any health or lifestyle conditions you may be able to release more money from your home. Over 100 conditions qualify you for a larger cash release from your home including high blood pressure, diabetes, cancer, angina, kidney disease, and dementia. Lifestyle conditions such as a history of smoking or a high/low Body Mass Index (BMI) can also qualify. No medical assessment is necessary, and one of our specialist advisers can find out if you qualify for this type of plan for you.

Protected Plans

If you want to guarantee an inheritance for your family this is now possible with some Lifetime Mortgages. You can choose a fixed amount or a percentage of your home to be left to your beneficiaries when your plan comes to an end. This amount will be guaranteed.

Interest Payment Plans

Interest payment plans allow you to choose how much interest you want to pay and how long you want to pay the interest charged each month (for example, 1 year, 5 years or even up to the lifetime of the loan). The advantage of this option is by paying some (or all) of the interest payments during the plan term, the amount your provider takes at the end will be less, as you have already paid off some (or all) of the interest accrued. Also, if for any reason you are unable to make repayments, this plan can be converted so interest is added as with a standard Lifetime Mortgage. With options such as this it is essential that you seek specialist independent advice and speak to one our advisers to find the best plan for your needs.

Home Reversion Plans

While most customers find that a Lifetime Mortgage suits their needs best, there is another type of Equity Release plan available. A Home Reversion plan allows you to sell part or all of your home to a reversion plan company in exchange for a tax-free cash lump sum.

You can have the right to stay in your home effectively rent-free for as long as you choose which is why you don’t typically receive the full market value for the share of the home you sell.

If you sold half of your property to the reversion company, when the plan comes to an end (usually when you pass away or move into long-term care) then the money raised from the resulting sale of your home would be split equally between the reversion company and your estate.

Some customers choose a Home Reversion plan because the amount of equity you are initially able to release is typically greater than compared to a Lifetime mortgage.

However, in exchange for this greater sum of equity you will have to be comfortable with the fact that:


  • You will no longer own your own home – however you can retain a percentage share
  • If your house value goes up, then you only benefit from the increase to the percentage you still own (if any)
  • You will receive less than the market value of your home (whatever percentage you sell)
  • As you are selling part of your home it can be very difficult to end the plan and buy back the percentage you sold, so it’s less flexible than a Lifetime Mortgage

For expert advice and more information or to book your FREE consultation please visit one of our websites, call or email.

Bristol Mortgages Online www.bristolmortgagesonline.co m Tel 0117 325 1511

Bath Mortgages Online www.bathmortgagesonline.com Tel 01225 584 888

Exeter Mortgages Online www.exetermortgagesonline.com Tel 01392 690 888

Boost to buying power from changes to affordability tests

By Caz Blake-Symes • May 1, 2025
Adapted from Zoopla’s April 2025 Housing report I mage: The analysis uses average house prices from the house price index and for first-time buyers to assess mortgage payments at different mortgage rates applied to a 30- year mortgage, at different loan-to-values. One emerging trend that we expect to positively support market activity in the coming months is a relaxation in how lenders assess the affordability of new mortgages. While buyers focus on the mortgage rate they will pay, lenders also check whether the borrower can afford a 'stressed mortgage rate' at a higher level than the borrower will pay. ​ While the average 5-year fixed rate mortgage is around 4.5% today, many lenders are currently 'stress testing' affordability at 8-9%. This makes it harder to secure a mortgage without a large deposit. If average mortgage stress rates were to return to pre-2022 levels of 6.5% to 7%, this would deliver a 15-20% boost to buying power. ​ An average first-time buyer with mortgage repayments of £1,020pcm at a 4.5% mortgage rate would typically have to prove they could afford monthly repayments of £1,550pcm at an 8.5% stress rate. If the stress testing is relaxed to 6.5%, repayments would fall to £1,275pcm, boosting buying power. It's a similar pattern for the average homeowner, while the actual impact will vary by lender and type of borrower. ​ This change would consequently supporting demand and sales volumes, helping to clear the stock of homes for sale, rather than boosting house prices. Other existing rules and regulations that remain in place will continue to impact the availability of mortgage finance.  Comment from Phil Clark “This is potentially very exciting news and will give borrowers a greater choice of products if these rules are relaxed. Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about the Mortgage and Protection products we offer, please visit www.bristolmortgagesonline.com Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

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By Caz Blake-Symes • February 19, 2025
Adapted from BBC Article by Kevin Peachey, Cost of living correspondent 13 February 2025 Two major lenders launched mortgage deals on Thursday with interest rates of less than 4%, as competition picks up in the sector. The prospect of further cuts in the base rate by the Bank of England has given mortgage providers confidence to reduce their own rates. But the attention-grabbing sub-4% deals by Santander and Barclays will not be available to all borrowers, particularly first-time buyers, and may come with a hefty fee. The return of such deals might prompt other lenders to follow suit after a period of tepid competition. Nationwide, the UK's biggest building society, has said it will reduce some of its rates on Friday. Mortgage deals with interest rates below 4% have not been seen since November. Across the whole market the average rate on a two-year fixed deal is 5.48%. The typical rate on five-year deals is 5.29%, according to latest figures from Moneyfacts. Time to decide Some tracker and variable rate mortgages move fairly closely in line with the Bank's base rate, which was cut to 4.5% a week ago. However, more than eight in 10 mortgage customers have fixed-rate deals. The interest rate on this kind of mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it. About 800,000 fixed-rate mortgages, currently with an interest rate of 3% or below, are expected to expire every year, on average, until the end of 2027. That means a higher monthly bill for many homeowners on their next renewal, but there are signs that the rate they could pay is on its way down.  Bank of England governor Andrew Bailey said the interest-rate setting committee expected to be able to cut rates further "but we will have to judge meeting by meeting, how far and how fast". This will affect savers who are seeing lower returns, but could bring better news for borrowers. The Bank's next rates decision is on 20 March. Message from Phil Clark “Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about Mortgage and Protection please visit www.bristolmortgagesonline.com
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