Lifetime mortgages are becoming more and more popular with homeowners over 55 who want to unlock some of the money tied up in their home—without selling it or moving out.

But despite how useful they can be, many people are still put off by things they’ve heard that just aren’t true.

Here we bust 10 of the most common myths we hear about lifetime mortgages—so you can separate the facts from the fear and decide what’s right for you or your family.

1. “You’ll end up owing more than your home is worth”

Not true. Most lifetime mortgages come with a No Negative Equity Guarantee. This means that even if house prices fall, you’ll never owe more than the value of your home when it’s sold. Your estate won’t be left with extra debt.

2. “You have to make monthly payments (or let the interest pile up)”

You don’t have to make payments—but many plans let you choose to make voluntary payments if you want to.

Some people pay off the interest as they go, others choose to let it roll up, and some do a bit of both. The flexibility is there to suit your circumstances.

3. “You’ll no longer own your home”

False. A lifetime mortgage is a loan secured against your home. You remain the legal owner, and your name stays on the deeds—just like with a standard mortgage.

4. “You can’t get one if you already have a mortgage”

You can still take out a lifetime mortgage even if you have an existing mortgage. You just need to use part of the money released to pay it off. This can be a great way to clear an interest-only mortgage with no more monthly repayments to worry about.

5. “There’ll be nothing left to leave the kids”

While a lifetime mortgage will reduce the value of your estate, it doesn’t mean you can’t leave an inheritance. Here’s how:

• Some plans let you protect a percentage of your home’s value.
  
• Voluntary payments can help preserve more equity.
  
• If house prices go up over time, there may still be value left over even after the mortgage is repaid.
  

6. “It’s an expensive way to borrow”

While lifetime mortgage rates tend to be higher than standard mortgages, they’re not always as expensive as people think—especially when compared to the cost of downsizing (legal fees, estate agent costs, stamp duty, removals etc.).

It’s all about weighing up the options and seeing what works best for your situation.

7. “You’ll pay tax on the money you release”

Good news—the money you release is tax-free.

However, if you invest the money or gift it to family, there could be tax implications down the line—so it’s always worth speaking to your accountant or wealth manager before making any big decisions.

8. “You have to take the full amount in one go”

Not true. Many lenders offer a flexible drawdown facility, so you can take money out as and when you need it. This helps keep interest down, as you’ll only pay interest on the funds you’ve actually withdrawn.

9. “Once you’ve taken one out, you’re stuck with it”

Lifetime mortgages are designed to be long-term, but that doesn’t mean you’re locked in forever.

Some plans allow early repayment—with or without an Early Repayment Charge (ERC). If flexibility is important to you, it’s worth choosing a product that offers low or no ERCs.

10. “You can’t move house”

You can move. Most lifetime mortgages are portable, meaning you can take your mortgage with you—providing your new property meets the lender’s criteria. If you think moving might be on the cards, make sure this is checked from the outset.

Is a Lifetime Mortgage Right for You?

Like all financial decisions, it depends. A lifetime mortgage can be a useful option for the right person—but it’s not for everyone.

The key is getting the right advice, understanding all of your options, and making a choice that fits your plans for the future.

If you’re over 55 and considering later life borrowing, or you want to help a family member do the same, feel free to get in touch. We’re happy to have a no-obligation chat and talk you through the pros, cons, and everything in between.