What is a life time mortgage?

A lifetime mortgage has some similarity with a conventional mortgage

• It is secured on the residential property.
• The collateral usually takes the form of a first charge.
• The mortgage deed sets out the rights of the lender and the obligation of the borrower.
• The administration and legal processes required to set up the loan are similar.

However, there are many crucial differences

• There is no specific term of years in the mortgage contract.
• The interest rate payable and charges incurred may be very different to a conventional mortgage.
• The risk factors to both the applicant and the lender are quite distinctive.
• Some schemes are not mortgages at all - for example, reversion schemes involve selling a stake in the property and not raising funds against it.