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Interest only lifetime mortgage

We can help you unlock your options as a homeowner. You may be able to release equity in your home without having to move.

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  Mortgage advice is available throughout the UK. This service is provided by StepChange Financial Solutions, part of StepChange Debt Charity. We are not a lender. We find products that suit your needs.

We help homeowners understand their financial situation

We are not a lender. We work on behalf of our clients to search the market for:

  • A range of mortgage and equity release products
  • Products that will best suit your needs

Read our guides on debt and money for homeowners.

Find out how we helped Steve

How it works

If you are over the age of 55, an IOLM could allow you to:

  • Release a cash lump sum via a mortgage secured on your home
  • Keep full ownership of your property

This can be the most cost effective method of equity release. As long as you keep up with payments.

It allows you to repay the interest charges monthly. If you keep up with the interest payments, the amount you owe never goes up.

To qualify, you must meet the provider’s affordability criteria.

If you cannot afford or choose not to make full repayments, there is another way to pay. You can elect to make partial payments to help reduce the long-term cost.

How one couple coped when their mortgage ended. Find out how we helped them with an interest only lifetime mortgage.

Benefits of an IOLM

  • The interest rate can be fixed for the life of the plan
  • If things change, you have the option to switch to a lifetime mortgage. There are no repayments. But a higher rate of interest may apply
  • You may be able to keep some of the equity. This is a good option if leaving money to friends or family is important to you
  • You may be able to borrow from it when you need to. If you want to access more funds in the future

Risks of an IOLM

  • You do not pay tax by releasing equity. But the way it is released might affect your:
    • Tax position
    • Entitlement to means-tested benefits
  • Future property prices might be higher or lower than they are today
  • Releasing equity from your home will reduce the value of your estate. This can affect the amount you can leave in your will
  • You need to be aware of how securing other debts against your home can affect you
  • Consolidating debts over a longer period may mean you pay more overall

To get more details on the features and risks, ask for a 'personalised illustration'.

Peter on Feefo says:

"An excellent service."

"Throughout the whole process of applying for and getting a Lifetime Mortgage the financial adviser and her colleagues were very helpful and careful to explain everything in the greatest detail. An excellent service."

Get help like Peter

Considering an interest only lifetime mortgage?

We will help you understand your choices. For free advice, fill out our contact form to request a call back.

How to apply

  1. Speak to our advisors for free, impartial advice.
  2. We will see if this is your best option
  3. If you qualify, we will guide you through the full process
  4. There is no need for a home visit. We will do everything over the phone

Why choose us?

  • Free advice: We do not charge you for advice. If you go ahead with equity release or a mortgage, on completion you will need to pay our Service Fee. This fee cannot be refunded
  • Unbiased: Our advisors are paid a salary. There are no sales targets, bonuses, or commissions. The advice you receive is always in your best interests
  • Trustworthy: Our Financial Solutions clients gave us a 4.9 out of 5-star average review on Feefo in 2022
  • Award-winning: We have won many awards for our service over the years

Common interest only lifetime questions

The amount you owe is repaid from the proceeds of the sale of your property either:

  • On death (with some, it is on the death of the last survivor), or
  • After a move into permanent long-term care

All plans carry a 'no negative equity' guarantee. This means that the amount owed can never be more than the value of your property.

Usually, the amount you can release depends on your age. The older you are, the greater the cash sum that can be released.

Most providers will release a fixed percentage based on your age.

For example:

  • A 60-year-old could release 20%
  • A 65-year–old could release 25%, and so on

The amount varies between providers.

The amount you can borrow also depends on:

  • The value of your property
  • Your age
  • Sometimes your health

All applications will be based on whether you can afford to repay the loan.

You may be able to. The amount you can leave will be based on:

  • The proceeds from the sale of the house, and
  • The amount owed on the plan when it is redeemed

If your plan has a lifetime fixed interest rate: You will know exactly what your future liability will be.

Some providers offer inheritance protection on their plans. This allows clients to protect a certain amount of the property’s future value. Your advisor can discuss this with you.

There are four main costs:

1. Advice fee

We do not charge any advice fees.

2. Valuation fee

Most lenders offer a free property valuation on any new applications. However, lenders do reserve the right to charge a valuation fee and where they do so, fees can vary between £200 and £1,000 depending on the value of the property. Any further advance applications may always attract a valuation fee.

Where a valuation fee is applicable, this would have to be paid on application to the lender.

3. Legal fee

We recommend that you agree a fixed fee with your solicitor. You will usually pay between £400 and £500.

You may need to pay more if:

  • You are buying a property, or
  • The legal position of your property is complex

4. Application fee

Some lenders may charge for this. Where this is the case it typically costs £695.

Is an IOLM right for me?

We will help you understand your choices. For free advice, fill out our contact form to request a call back.

Couple in a beer garden

Home reversion plans

Sell a share of your home, or all of it, for a cash lump sum and rent-free lifetime tenure.

Find out more

StepChange Financial Solutions is a registered trading name of Consumer Credit Counselling Service (Equity Release) Ltd. Authorised and regulated by the Financial Conduct Authority. FCA reg. no. 517674.

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