Enhanced Lifetime Mortgages

If you’re considering an equity release plan to capitalise on some of the value in your home and a regular scheme doesn’t allow you to take as much cash as you need, then it’s worth checking to see if you’re eligible for an enhanced lifetime mortgage.

In this article we’ll look at what exactly an enhanced lifetime mortgage is, how they are calculated and whether you might qualify based on your health and lifestyle.

What is an enhanced lifetime mortgage?

An enhanced lifetime mortgage is a type of equity release product – a variation on a lifetime mortgage targeted specifically at people with serious illnesses or lifestyle conditions. It works in the same way as a lifetime mortgage, releasing equity from your home as either a cash lump sum or drawdown, but allows you to borrow more and get reduced interest rates, depending on the severity of your illness.

Essentially an enhanced lifetime mortgage, sometimes also known as an imparied lifetime mortgage, allows you to cash in on your bad health, as lenders predict your life expectancy to be lower than average and as such see the lending as lower risk.

Why would you get one?

There are several benefits to an enhanced lifetime mortgage – primarily higher limits on what you’re able to take cash out of your property as a lump sum, as well as lower interest rates. There is no medical to complete and the application process is simple with just a few questions about your health and lifestyle. Enhanced lifetime mortgages come with a no negative equity guarantee meaning that, regardless of how much you borrow, any negative equity shortfall will always be the responsibility of the equity release provider.

Many people use the cash from an enhanced lifetime mortgage to make adaptations to their home to enable them to live more comfortably with their illness, while some take advantage of the drawdown facility to pay for any ongoing medical costs.

The benefit of using the drawdown facility on an enhanced lifetime mortgage is that interest only starts to accrue on each chunk as it is paid, rather than paying interest on a whole lump sum from day one. Other people may just want to release enough equity to be able to enjoy life to the best of their abilities while they still can.

Eligibility criteria

Some of the basic eligibility criteria for an enhanced lifetime mortgage will be the same as for a standard lifetime mortgage, such as a typical minimum age of 55 and owning your home outright.

To find out whether or not you are eligible for an enhanced lifetime mortgage, your lender will ask you to complete a short questionnaire looking at specific areas of your health and at lifestyle habits that could affect your life expectancy.

Which illnesses are covered?

There isn’t a fixed list of illnesses covered by an enhanced lifetime mortgage, and different lenders may consider different factors, but typically they will look at significant life-limiting health and lifestyle conditions including:

• Whether or not you smoke
• Your weight
• Your blood pressure
• Any history of heart conditions or strokes
• Specific illnesses including diabetes, Parkinson’s, MS or dementia
• Any regular prescription medications you take
• Cancer diagnosis and treatment
• Early retirement due to ill health.

How they are calculated

The primary factors used in the calculation for an enhanced lifetime mortgage are the age of the youngest homeowner and the value of the property. This calculation is then adjusted depending on your answers to the health and lifestyle questionnaire.

The specific calculations may vary between lenders, but essentially they will look at the number of existing health conditions and their severity and consider the impact on life expectancy. In very simple terms, the worse your health, the more you can borrow. Any health conditions will normally be verified by writing to your GP.

You can use our calculator below for an estimate of how this may work out for you:

How an equity release broker can help

An enhanced lifetime mortgage isn’t always as straightforward as a standard mortgage and it can often feel confusing trying to work out your eligibility and calculating how much your loan might end up costing you. It can also be difficult knowing which lenders to approach, as many are specialist equity release providers who you won’t recognise from the high street.

A specialist equity release broker can help by assessing your unique circumstances and using their knowledge of the market to match you with the most appropriate lender. Equity release can be a costly form of borrowing, and having an expert find and negotiate rates on your behalf could ultimately save you significant amounts of money.

Make an enquiry with us and we’ll quickly assess your needs and circumstances to pair you with the equity release advisor who’s best placed to help you secure the right enhanced lifetime mortgage deal for you.

Which lenders offer enhanced lifetime mortgages?

Getting an enhanced lifetime mortgage isn’t simply a case of popping along to your high street bank – you’ll need to look at specialist equity release providers and find out which are happy to offer enhanced options.

The following companies are among the leading providers of products enhanced lifetime mortgages and equivalent products…

• Aviva
• More2Life
• Just Mortgages

Each of these equity release providers offer enhanced lifetime mortgages with different benefits and features. Your broker is best placed to help you decide which lender and which plan is best for you.

Get matched with a broker who specialises in enhanced lifetime mortgages

An enhanced lifetime mortgage is not something to be entered into without expert advice, but it can be difficult to know where to go for help. Fortunately with our expert broker matching service you don’t need to worry about finding the right person, as we’ve hand picked and vetted all of the advisors we work with in advance.

Give us a call on 0808 189 0463 or make an enquiry and we’ll take you through a quick assessment to work out exactly which of the specialist advisors we work with is best for you. We’ll arrange a free, no obligation chat with a broker who has experience of securing enhanced lifetime mortgages and who will be best placed to help you get the very best deal.