What is a Payment Term Lifetime Mortgage?
Tax-free cash lump sum with set monthly interest payments for an agreed payment term.
Our Payment Term Lifetime Mortgage is a type of equity release for customers aged 50 and over. You must (or if borrowing jointly one of you must) still be in employment. Its a loan secured against your home which allows you to borrow some of your home's value while you still live there.
You get a tax-free cash sum and must pay off the interest by making monthly payments until you retire or reach age 75 whichever is sooner. As you’re committing to pay monthly interest for a set Payment Term, we may be able to lend more to you than you’d be able to borrow with our other lifetime mortgages.
This lifetime mortgage is usually repaid in full from the sale of your home when you, or the remaining applicant (if the mortgage is in joint names) dies or moves out of your home into long term care. Any money left from the sale of your home would be available to you or your beneficiaries.
As a last resort, your home may be repossessed if you do not keep up with payments
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Tax-free cash
Since the money you release, with a lifetime mortgage is borrowed from your equity, it remains tax-free.
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Monthly payments
You will make monthly interest payments until the end of your chosen payment term and then the unpaid interest is added to the amount you owe.
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You can make partial repayments
At the end of your chosen Payment Term, when you’ve stopped making Monthly Interest Payments, the Optional Partial Repayment feature enables you to pay part of the lifetime mortgage off early with no Early Repayment Charge subject to our Terms and Conditions.
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Guaranteed no negative equity
We guarantee that your beneficiaries will never have to pay more than the sale value of your home. This is as long as the property is sold for the best price reasonably obtainable and you’ve met the product Terms and Conditions.
The No Negative Equity Guarantee won’t apply to any monthly interest payments you fail to make in full, and on time, throughout the Payment Term. This includes any interest which has accrued on any monthly interest payments you fail to make.
If you have any outstanding monthly payments you will need to pay these and any interest that has accrued on them.
- Am I eligible?
You must be 50 or over and living in (or buying) your own home, with either a small or no mortgage. Your home will need to be worth a minimum of £70,000 or £100,000 for flats, maisonettes, ex-council, ex-housing association or ex-Ministry of Defence properties. You, or if borrowing jointly one of you must, be in some form of paid employment and able to afford to make monthly interest payments for your chosen payment term.
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I have an Interest Only Mortgage
If you have an existing interest only mortgage that’s coming to an end and you can still make monthly interest payments then a Payment Term Lifetime Mortgage, Optional Payment Lifetime Mortgage or Retirement Interest Only mortgage could be for you. With our Payment Term Lifetime Mortgage you must pay all of the monthly interest for your chosen term. After that, the unpaid interest is added to the amount you owe. The other two products have different repayment commitments.
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Make monthly interest payments
You will make monthly interest payments for a chosen payment term. This can be up to our retirement date or age 75, whichever is sooner. This will reduce the overall cost of your loan and may enable you to borrow more than with other lifetime mortgages. The earliest age your payment term can end is 55.
- Commitment to repaying your monthly interest payments
As a last resort, your home may be repossessed if you do not keep up with payments -
Impact on inheritance
A lifetime mortgage will reduce any inheritance you wish to leave. There is an option to take inheritance protection to secure a proportion of the net sale proceeds of your home.
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Early Repayment Charges
As a lifetime mortgage is designed to last a lifetime, if you decide to repay your lifetime mortgage in full, you may have to pay an Early Repayment Charge which could be substantial, so think carefully before you decide.
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Moving home
You can move home, and the loan will be transferred as long as the new property meets our requirements.
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Means tested benefits
Taking out a lifetime mortgage may affect your entitlement to means-tested benefits or pension credit.
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Compound interest
Interest is charged on the loan, plus any interest already added. When you have finished making monthly interest payments, the amount you owe will increase over time. There may be cheaper ways to borrow money.
Equity release calculator
This calculator helps you see how much equity you could release with a lifetime mortgage, a loan secured against your home. We’ll ask you to register your details so we can show you the calculation. You may also receive a call from us to assist you with your enquiry.
Examples of how Payment Term Lifetime Mortgages work
The tables below show how much your monthly repayments would be based on you borrowing the maximum amount available, if you were aged 55, 65 or 70 and had a property value of £425,000. The specific interest rate you're charged will be based on your individual circumstances, the below examples are for illustrative purposes only.
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Get in touch about our lifetime mortgages
To speak to us about a lifetime mortgage, call our advice team on the number below.
For any other enquiries please get in touch via our contact us page
Monday to Friday 9:00am - 6:00pm
Saturday 9:00am - 1:00pm
We may record and monitor calls.
Need help?
Making decisions about how to finance your retirement is important so it’s worth shopping around and using available guidance and advice, before you buy.
Retirement guidance
Equity Release Council
Legal & General Home Finance Ltd is a member of the Equity Release Council, a trade body setting standards for providers.
Take a look at their consumer brochure for more details
Contact us about equity release
Call us on:
Monday to Friday 9am - 6pm,
Saturday 9am - 1pm.
We may record and monitor calls.
For any other enquiries please get in touch via our contact us page.
Get independent advice
You can't take out an equity release product unless you have taken financial advice.
Find out how to access independent legal and financial advice.