One of the most common misunderstandings we come across is the idea that you can’t take our a lifetime mortgage if you still have a mortgage on your home.
This simply isn’t the case.
In fact, many people use a lifetime mortgage specifically to repay their existing mortgage. By doing so, this can remove the pressure of monthly repayments and give more financial flexibility in later life.
Here’s how it really works.
Can You Get a Lifetime Mortgage When You Already Have a Mortgage?
Yes, this is possible.
A lifetime mortgage can be used to repay your existing mortgage, and lenders will normally require that this is done as part of the process.
The money you release is used first to clear your outstanding balance, with any remaining funds available for your other plans.
This means you can:
- Continue living in your home
- Remove the pressure of making capital repayments
- Avoid needing to remortgage on affordability grounds
- Reduce the stress of an interest-only mortgage approaching its end date
For many people, this can be a practical way to stay in their home while gaining more control over their finances in retirement.
Why Do People Think They Can’t Do This?
The misconception usually comes from the belief that equity release is only available if your mortgage has already been paid off.
While your existing balance could affect how much equity is available, you don’t need to be mortgage free.
As long as there is enough equity in your home to repay your current mortgage and meet lenders’ criteria, a lifetime mortgage could be an option.
Clearing an interest-only mortgage with no repayment plan is one of the most common scenarios we see.
A Typical Example
Picture a homeowner in their late 60s with an interest-only mortgage of £70,000:
- Their lender won’t extend the term
- They don’t meet affordability rules for a new standard mortgage
- They don’t want to move home
- They don’t have the savings to clear the balance
A lifetime mortgage could allow them to:
- Release enough to repay the £70,000 mortgage
- Remove the need for monthly repayments
- Stay in their home for the long term
Depending on the value of the property, they might even release some extra funds for home improvements, family gifting or supplementing retirement income.
Things to Think About
A lifetime mortgage won’t be right for everyone, and it’s important to consider:
- Whether leaving an inheritance is a priority
- How long you want to stay in your home
- Your health and long-term plans
- Alternatives such as downsizing or a Retirement Interest-Only (RIO) mortgage
Understanding how interest works is also important. You don’t have to make payments, but the interest will usually roll up over time. Many plans now offer flexible features:
- Voluntary payments
- Partial repayments
- Drawdown facilities
These can help you manage the long-term cost and keep more control over the equity in your home.
Our Thoughts
Reaching the end of a mortgage term, especially on an interest-only product, can feel stressful if you don’t have a repayment plan in place.
A lifetime mortgage is not the right answer for everyone, but for many people it provides options when traditional mortgages no longer fit.
The ability to repay an existing mortgage, remove regular payments, and stay in your home can offer real peace of mind in later life.
If you’re approaching the end of your interest-only mortgage and not sure what your next step is, you’re certainly not alone.
We’re here to help you explore your options and understand what could work best for your circumstances.
Risk Warning: This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Information correct at time of writing – November 2025.
Easy Street Financial Services Limited is authorised and regulated by the Financial Conduct Authority. FCA No. 1013595.
