Do You Lose Ownership of Your Home with a Lifetime Mortgage?
For many homeowners considering ‘equity release’, one of the biggest concerns is the belief that taking out a lifetime mortgage means losing ownership of their home.
This misconception often leads to unnecessary hesitation, preventing people from accessing the financial benefits that could support their retirement plans.
So, let’s set the record straight: if you take out a lifetime mortgage, you still own your home. Here’s everything you need to know
Understanding Lifetime Mortgages: How They Work
A lifetime mortgage is a loan secured against your home that allows you to release equity while continuing to live in the property. The loan (plus interest) is repaid when you pass away or move into long-term care.
Unlike a home reversion plan, where you sell a percentage of your property in exchange for a lump sum, a lifetime mortgage does not involve selling any part of your home—so you remain the legal owner.
This means you –
- Stay on the title deeds
- Remain in control of your home
- Are free to live there for life
The only difference is that your home is used as security for the loan—just like a traditional mortgage.
Why Do People Think They Lose Ownership?
1. Confusion Between Lifetime Mortgages and Home Reversion Plans
Some people mistakenly believe that all forms of equity release involve selling their home. While home reversion plans do require you to sell part (or all) of your property, lifetime mortgages do not.
2. Misconceptions About Mortgage Debt
Because a lifetime mortgage is secured against your home, some people assume they no longer own it. However, this is no different from a standard mortgage. You still own your property while the lender holds a financial interest in it.
Key Features That Protect Your Homeownership
If you’re still unsure, here are some important safeguards that ensure you keep control of your home with a lifetime mortgage:
🔹 No Negative Equity Guarantee
With most lifetime mortgages, you’ll never owe more than the value of your home. This ensures your estate isn’t left with additional debt.
🔹 Flexible Payment Options
While you don’t have to make monthly payments, some lenders allow voluntary repayments. This can help manage the amount of interest payable and preserve more equity.
🔹 Portability – You Can Move Home
If you decide to downsize or relocate, many lifetime mortgage products are portable, meaning you can transfer the mortgage to a new property (subject to lender approval)
What Happens When the Loan Is Repaid?
The lifetime mortgage is typically repaid when you pass away or move into long-term care. At this point, your home will either be sold to settle the loan or, if your beneficiaries wish to keep it, they can repay the mortgage using other funds.
Because you still own the property, your family remains in control of the sale process and any remaining equity belongs to your estate.
Is a Lifetime Mortgage Right for You?
If you need access to additional funds in retirement but want to stay in your home, a lifetime mortgage could be a viable solution. However, it’s essential to get the right advice to understand all your options.
