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Key's award-winning lifetime mortgage service
A lifetime mortgage is a type of equity release which is a loan secured against your home. It lets homeowners aged 55+ release some of the tax-free funds tied up in the value of their home.
Watch our video to find out more about Key's equity release and see if it could be an option for you.
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Transcript
When it comes to equity release, we all have questions.
What, for instance, is it exactly?
Equity release is a way for homeowners over 55, whose property is worth at least £70,000, to release tax-free cash from their homes.
And will we still own our home?
Yes – and with Key’s plans you can stay in it for as long as you like.
Will we have to make monthly repayments?
No, not unless you want to. The loan, plus rolled-up interest, will be paid back when your plan comes to an end.
Could our family inherit the debt?
No – all of Key's plans come with a ‘no negative equity’ guarantee, so you’ll never owe more than your home is worth and there’ll never be a debt for your family to take on.
How much can we release?
This depends on your age, how much your house is worth and your general health. Find out how much you could release with our free calculator.
What do people usually use the money for?
Key customers spend the tax-free cash on many different things, such as repaying existing debts, travel, and home improvements.
So, what’s different about Key?
Because Key takes a personal and honest approach to equity release, it's good to know we can answer all your questions in a way that's right for you. By ordering our free expert guide, using our free online calculator, or by calling us.
Key - for the life in later life.
What, for instance, is it exactly?
Equity release is a way for homeowners over 55, whose property is worth at least £70,000, to release tax-free cash from their homes.
And will we still own our home?
Yes – and with Key’s plans you can stay in it for as long as you like.
Will we have to make monthly repayments?
No, not unless you want to. The loan, plus rolled-up interest, will be paid back when your plan comes to an end.
Could our family inherit the debt?
No – all of Key's plans come with a ‘no negative equity’ guarantee, so you’ll never owe more than your home is worth and there’ll never be a debt for your family to take on.
How much can we release?
This depends on your age, how much your house is worth and your general health. Find out how much you could release with our free calculator.
What do people usually use the money for?
Key customers spend the tax-free cash on many different things, such as repaying existing debts, travel, and home improvements.
So, what’s different about Key?
Because Key takes a personal and honest approach to equity release, it's good to know we can answer all your questions in a way that's right for you. By ordering our free expert guide, using our free online calculator, or by calling us.
Key - for the life in later life.
What can I use a lifetime mortgage for?
The money you unlock through a lifetime mortgage is tax-free. You can use it in several ways, such as:
A lifetime mortgage could help you take control of your later life finances. See how much you could release from your property with our quick and easy lifetime mortgage calculator.
Calculate now
There are four types of lifetime mortgages available with Key and they work in different ways.
There are usually no monthly repayments to make with a lifetime mortgage. The loan, plus compound interest, is usually repaid through the sale of your property. This is generally when the last remaining applicant on the deeds passes away or moves into long-term care.
If you want to reduce the long-term cost of your plan, you can make voluntary payments of up to 10-12% each year without any early repayment charges.
Is a lifetime mortgage safe?
Lifetime mortgage products come with a range of safeguards and protections.
In addition, Key is a proud member of the Equity Release Council, which is a trade body with high standards of conduct within the equity release market.
All of our lifetime mortgages meet the Equity Release Council standards, meaning you'll:
ⓘ Did you know...
You have to get advice from a qualified equity release adviser before applying for a lifetime mortgage. It’s a regulatory requirement. This makes sure we find the plan that's right for you.
Is a lifetime mortgage right for me?
If you're thinking about a lifetime mortgage, it's important you have all the facts.
Download your free, comprehensive guide today to see if it could be right for you.
Our equity release advice relates to Key's range of lifetime mortgages only - loans secured against your home.
Watch our video to learn more about the benefits and drawbacks of equity release and see if it could be right for you.
To be eligible for a lifetime mortgage, you must be:
- Aged 55+ (including the youngest applicant)
- A UK homeowner with a property worth at least £70,000
ⓘ Not eligible yet?
Try our later life mortgage finder. We could still help you take control of your later life finances.
Key lifetime mortgage customers accessed £78,334 on average
Key Market Monitor 2023
The amount you can release is a percentage of your home's value (loan to value, or LTV). This varies between people and properties and is personal to you. The lowest amount you can release is £10,000.
Try our lifetime mortgage calculator to quickly see how much you could release from your home.
Lifetime mortgage interest rates vary depending on your plan and circumstances. They're fixed for the life of your plan.
Representative example
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AER stands for Annual Equivalent Rate. It shows what the interest rate would be if the interest compounded each year.
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APR stands for Annual Percentage Rate. It's the cost you pay each year to borrow money, including fees, expressed as a percentage.
Key is a specialist, award-winning lifetime mortgage provider for the over 55s. We've helped over a million customers see if equity release was right for them. After we take the time to understand your needs, we'll recommend the most suitable later life option for you.
Our £1,299 advice fee is only payable on completion of taking out the lifetime mortgage.
Customer stories
Don't take our word for it - see what our lifetime mortgage customers are saying...
John's story
69, Retired
“I sat down with the adviser and he went through every single detail and concerns, plus a lot more which I didn’t know about. They took care of everything… it’s so uncomplicated… the process is so easy.”
Watch more of our customer stories
Next steps to release equity from your home
Your other options with Key
If another product is more suitable, we'll refer you to a different adviser within Key Group to help. If you go ahead, you'll only be charged the same £1,299 advice fee you'd pay with us, even if their fee is usually higher. Key offers alternatives to equity release such as a retirement interest-only mortgage or retirement repayment mortgage.
Other options to think about
It's important to know your other options before going ahead with a lifetime mortgage. These include: a home reversion plan, downsizing, unsecured lending, using existing assets, or support from friends or family.
With a lifetime mortgage, the interest accrues, then rolls up and adds to the loan. This is also known as compound interest. The interest rate you get will be specific to your circumstances and fixed for the life of the loan.
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The interest rate when your plan starts determines how quick interest grows. This will impact the total cost of borrowing over the term of the loan.
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During the first period the interest is charged and added to the original loan amount. Following this, the interest is then calculated and charged on what you owe at the time. This is the original loan plus interest, not just the amount you initially borrowed.
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This means a larger amount of interest adds to your lifetime mortgage each period. This cycle continues until the plan ends.
The interest is added either monthly or annually depending on your plan. There are ways you could reduce the total cost of borrowing of your lifetime mortgage.
ⓘ Illustrative example
Illustrative purposes only. It uses the average release amount of £82,475 and monthly equivalent rate (MER) of 6.3% – Key Market Monitor H1, 2023. Average UK house price of £288,000 – ONS, August 2023.
| Year | Balance at start of year | Interest (6.3% MER)¹ | Balance at end of year² | Remaining property equity³ |
|---|---|---|---|---|
| 1 | £82,475 | £5,349 | £87,824 | £200,176 |
| 2 | £87,824 | £5,695 | £93,519 | £194,481 |
| 3 | £93,519 | £6,065 | £99,584 | £188,416 |
| 15 | £198,778 | £12,891 | £211,669 | £76,331 |
| 20 | £272,153 | £17,649 | £289,802* | £0 |
* The end of year balance is higher than the property's value. You'll never owe more than your home's worth, though, with a Key lifetime mortgage. This is the no negative equity guarantee.
¹ The rate at which interest adds to the loan – in this case, monthly (MER). All Key lifetime mortgages have a fixed interest rate for life. This column shows how much interest has added to the loan that year.
² How much is owed at the end of the year, including compound interest.
³ The difference between your property value and your outstanding lifetime mortgage balance.
You could save thousands over the course of your plan with a drawdown lifetime mortgage. This is because you only pay interest on the funds you release. Future drawdowns aren't guaranteed and subject to interest rates when you drawdown - not your original rate.
ⓘ Illustrative example
Illustrative purposes only. It uses the average release amount of £81,703 and monthly equivalent rate of 6.74% (future drawdowns will be charged at the prevailing interest rate) - Key Market Monitor Q1, 2023.
Mrs Lewis and Mr Davies both released £81,703. They took it in different ways to meet their needs. Over the same 15-year period, with the same total release, Mr Davies saved almost £32,851 in interest compared to Mrs Lewis.
Lump sum case study, Mrs Lewis
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Mrs Lewis took her £81,703 in one go
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Interest was charged on the full release from day one (monthly rate of 6.74%)
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Total cost of borrowing after 15 years: £223,915
Drawdown case study, Mr Davies
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Mr Davies took an initial loan of £51,703 from his facility
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He took two £15,000 drawdowns in year 5 and 10 - interest was only charged when the funds were released
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Total cost of borrowing after 15 years: £191,064
If you're looking for ways to release funds from your home, you may be wondering: is equity release the same as a lifetime mortgage? A lifetime mortgage is a type of equity release, allowing you to free up tax-free funds in later life.
The other type of equity release is a home reversion plan. This involves selling all or part of your home for less than the market value to a provider in exchange for a lump sum. We offer lifetime mortgages only, where you keep full ownership of your home.
Read more about lifetime mortgages vs equity release.
The cost of a lifetime mortgage depends on a few factors, like your plan and provider. There are four initial fees you may need to budget for (if applicable to your plan):
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Surveyor's valuation: Usually paid with the application
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Solicitor's fees: Usually paid when you receive your tax-free funds on completion
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Lender's application fee: Usually paid when your plan begins, and you receive your tax-free funds
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Our fixed advice fee: Our fixed advice fee of £1,299 is only payable on completion
If you currently receive or are eligible to claim means-tested benefits, taking out a lifetime mortgage may affect your eligibility as it will change your financial situation. Our advisers can review your current position and discuss your options moving forward including how a lifetime mortgage plan may affect any benefits you receive.
More on lifetime mortgages and benefits
Read our RetireWise articles to learn more about how a lifetime mortgage works and if it's right for you.
Page last updated: Wednesday 02 October 2024