Lifetime Mortgage

Scottish Widows Bank Lifetime Mortgages

What is a lifetime mortgage? 

If you’re aged 55 or over, a lifetime mortgage could allow you to unlock some of the equity from your home without having to move. It could last for the rest of your life, usually being paid in full when you die or permanently move out of your home. It is important to fully understand what this mortgage means for you and your loved ones, so you will need to get advice. Once you have the key information, you can determine if this is the right option for you.

How a lifetime mortgage could help you

Reasons why you might consider a lifetime mortgage

Unlocking some of the value from your home could be the key to a more comfortable future. Here are just some of the things you might need the money for:

Home improvements

Funding a new car or vehicle

Supporting children, grandchildren or loved ones

Adding to the enjoyment of your retirement

Taking a holiday or visiting relatives abroad

Consolidating personal debt

How a lifetime mortgage works

Borrow a sum of money

Borrow a sum of money

You can unlock some of the equity in your home to borrow a lump sum, or a lump sum with smaller amounts over time (which is known as a future release or drawdown). 

Compound interest

Compound interest

Typically, interest is charged at a fixed rate. But unlike other mortgages, you don't have to pay the interest each month. Instead, interest is charged on the loan, plus any interest already added. So, the amount you owe will increase quickly over time. There may be cheaper ways to borrow money.

Repay it all

Repay it all

When you move out of your home permanently, or if you die, everything you owe will need to be paid back. This includes the amount you borrowed, the accumulated interest, and any charges. If you have a joint mortgage, the mortgage will need to be repaid when the last-named borrower moves out permanently or dies. You may choose to repay your loan earlier than this, however an Early Repayment Charge may then apply. 

Is a lifetime mortgage right for you?

Things to consider based on your individual circumstances

Its important to understand the types of things you need to consider before releasing equity from your home.

  • You can take a cash lump sum, or a lump sum and then smaller amounts over time.
  • You will continue to own your home until the mortgage needs to be repaid upon death or long term care of the last surviving borrower.
  • If you want to make sure that there’s some equity left for you, or to leave to your friends or family, when you apply for your Lifetime Mortgage you’ll need to ring fence a percentage of the value of your home.
  • No monthly payment is required but interest will continue to be added to the amount owed.
  • You will have the right to move to an alternative property (subject to lending policy and criteria at the time) without having to pay any early repayment charges.
  • You will be protected by the 'No Negative Equity Guarantee' meaning your estate won't have to repay more than what your home sells for even if you owe more.
  • Your entitlement to means-tested benefits may be affected if you take out a lifetime mortgage.
  • You can make some overpayments over the life of the mortgage without penalty but, early repayment charges may be payable if you want to repay more or repay the mortgage in full. These do not apply on death or moving into long term care.

How can we help?

A lifetime mortgage is a big decision.  Our Later Life Lending Adviser will have an initial discussion with you to understand your requirements. 

If appropriate, your adviser will then arrange a more detailed discussion with you to understand your needs and circumstances and cover other alternative solutions that may be more appropriate. 

You'll be encouraged to talk through your decision with your loved ones as it's important to fully understand what your options could mean for you and those around you.

If our Later Life Lending Adviser decides that a lifetime mortgage is right for you, they’ll explain the risks and talk you through the application process and next steps.

This will include:

A Personalised Recommendation

A Personalised Recommendation

Your Later Life Lending Adviser will provide and talk you through a personalised illustration, along with a detailed summary of their recommendation on how a lifetime mortgage is suited to your needs and circumstances.

Your Application

Your Application

If you'd like to go ahead after receiving your recommendation, your Later Life Lending Adviser will complete a lifetime mortgage application with you.

A Valuation

A Valuation

We'll instruct a free independent valuation to be carried out on your property to ensure it meets our lending policy. The valuer will contact you to arrange a suitable time and date to book your appointment.

Your Offer

Your Offer

Once your valuation has taken place and your application is agreed, we'll issue you with an offer document for you to review and agree to.

Independent Legal Advice

Independent Legal Advice

As part of the application process, you will be required to obtain independent legal advice. This is to ensure you fully understand any risks and implications to you and your loved ones of taking a lifetime mortgage. Your Later Life Lending Adviser will explain this in more detail.

Completion

Completion

When all the required legal steps have been completed, we will release your funds to your solicitor. They will then pass this to you after repaying any outstanding mortgage/loans secured against your property.

Are you eligible for a Scottish Widows Bank Lifetime Mortgage?

Are you eligible for a Scottish Widows Bank Lifetime Mortgage?

You may be if:

  • all applicants are aged between 55-85
  • you are applying for a single or joint application
  • the lifetime mortgage is for your main residence
  • the property is in England, Scotland or Wales
  • you already own the property

What next?

What next?

You can find out if you are eligible to apply using our Scottish Widows Bank Lifetime mortgage checker.

If you qualify, one of our advisers will call you, at a time that suits you, to give you professional equity release advice and will explain the process.

Or you can call us on 0345 122 1607

Our lines are open Monday to Friday 8am - 8pm, Saturday 9am - 4pm. We're closed on Sundays and Bank Holidays.

Commonly Asked Questions

  • Yes. With a lifetime mortgage, you'll still own your home and can stay in it for as long as you like, subject to your mortgage's terms and conditions.

  • The amount you release will be based on your age and property value. To find out how much equity you might be able to release, talk to a Later Life Lending Adviser who will assess your individual needs and circumstances and talk through your options.

  • Yes. Just as with any mortgage, there are fees associated with a Scottish Widows Bank lifetime mortgage. Your adviser will discuss what fees may be applicable.

  • Our lifetime mortgage interest rates are based on your individual circumstances, such as your age and property value and how much cash you would like to release. Interest is charged on the total borrowing, which increases the amount you owe. If our Later Life Lending Adviser recommends you take a lifetime mortgage, they will explain how interest is calculated and arrange a personalised illustration, which will show you your interest rate.

  • Yes. Before taking out a lifetime mortgage you have to obtain independent legal advice. Your Later Life Lending Adviser will advise you when this is required.

  • A lifetime mortgage application tends to take around eight weeks to complete, from initial application to the first release of funds. Some applications can take more or less time depending on the individual circumstances of your application.

  • Applicants must be aged between 55-85 applying for a single or joint application (maximum age limit only applies to younger applicant) looking to borrow at least £30,000.

  • A lifetime mortgage may affect your tax and welfare benefits position, as tax and welfare benefits can change. You should consider seeking further information from HM Revenue and Customs, Benefits Agency or other sources of advice, such as your local Citizens Advice Bureau.

  • Yes. You have the option to protect a percentage of the equity in your home with a Scottish Widows Bank lifetime mortgage. The amount you can protect will be dependent on your individual needs and circumstances. You will need to get advice to check that a lifetime mortgage will meet your needs if you want your family or others to inherit your home. If you are in doubt, you should seek independent legal and financial advice.

Equity Release Council logo

Scottish Widows is proud to be a member of the Equity Release Council and abides by its standards. The Equity Release Council was established 30 years ago and is the industry body for the UK equity release market. 

Scottish Widows Bank is a trading name of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales, no. 2065. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278.