Age Partnership
- FREE equity release online calculator
- Rated Excellent By Over 5,900 People
- Compare the whole of the market
If you’re in poor health and need funds, you might be considering “unlocking” some of the value in your property. One way to do this is through an enhanced lifetime mortgage – here’s what you need to know about these.
Also known as an “impaired” lifetime mortgage, an enhanced lifetime mortgage is a form of equity release available to those in poor health who are looking to access more of the equity they own in their home.
An enhanced lifetime mortgage is a specialised type of loan for homeowners with reduced life expectancy. As a result, they’re able to borrow a larger share of the equity they have in their home, and also receive a lower interest rate. The loan amount (along with any interest) is repaid once you sell the property, unless you’ve taken out an enhanced interest-only lifetime mortgage.
Enhanced lifetime mortgages can be offered on either a lump sum or drawdown basis, which means you can either access the full equity amount up front, or unlock parts of your equity as and when you need it.
While most lifetime mortgages are available to those aged 55 or over who own a home that’s worth at least £70,000, the requirements for an enhanced lifetime mortgage may be stricter, and you’ll need to meet specific health-related criteria to be eligible.
This will depend on the type of lifetime mortgage you take out. An enhanced interest-only lifetime mortgage will require you to make monthly interest repayments, whereas a lump sum or drawdown lifetime mortgage has no monthly payments, which means you’ll pay the full amount of interest at the end of the loan.
However, there are some initial costs that you will need to cover when applying for an enhanced lifetime mortgage, including:
Enhanced lifetime mortgages are typically offered with lower interest rates than other types of equity release, with APRs ranging from 2%. However, the specific rate you receive will be based on your personal situation and health record, with the best rates generally offered to those whose life expectancy is most reduced.
Like with other forms of lifetime mortgage, you’ll need to be a homeowner and at least 55 years old to qualify for an enhanced lifetime mortgage. However, enhanced lifetime mortgages also have specific health-related requirements you’ll need to meet to be eligible.
You’ll need to complete a questionnaire to assess your eligibility for an enhanced lifetime mortgage, which is used to determine whether you’re in poor enough health. The questionnaire will cover conditions such as:
In order to apply for an enhanced lifetime mortgage, you’ll generally need to arrange a meeting with a specialist adviser or broker who can explain your equity release options. Once you’re ready to apply, you’ll first need to complete a health-related questionnaire to determine your eligibility for an enhanced lifetime mortgage, and can request a quote to see how much equity you’ll be able to unlock.
If you’re satisfied with your quote, you can then begin the formal application process.
Find out if a bridging loan could be a good option versus other types of finance if you’re buying land. We explain the pros and cons and how to get the best deal.
Find out the value of your property, and how much you could borrow, with our free equity release calculator.
It can help let you access additional funds, but is equity release a good idea?
Discover how you can use buy-for-university mortgages to buy property as a student.
Discover how the Help To Buy government scheme can make it more affordable to buy a new-build property in the UK.
Unlock the equity in your home upfront with a lump sum lifetime mortgage.
Everything you need to know if you’re considering taking out a refurbishment loan to renovate an investment property, whether it’s for buy-to-let or to add value.
Complete guide to buying at auction with a mortgage. Find out which types of properties could be unmortgageable and how to get your finances in place before the auction.
If you want to unlock the equity in your home but keep your interest costs down, an interest-only lifetime mortgage could be for you.
Discover the best bank for a mortgage in the UK using real customer reviews from our customer satisfaction survey.