Enhanced Lifetime Mortgage

Do You Need an Enhanced Equity Release to Help You Deal With Your Declining Health?

Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui

If You're Considering an Enhanced Lifetime Mortgage Plan, You Need to Take the Following Factors Into Acount Before Choosing the Best Equity Release Plan...

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What’s an Enhanced Lifetime Mortgage?

A Complete Guide to Enhanced Lifetime Mortgages in Dec 2021

Your retirement finances could be one less thing to worry about!

If you’re suffering from a life-threatening or severe illness, the last thing you want to worry about is money. Life is hard enough, but living with medical bills, debilitating pain, and financial stress can be torturous.

An enhanced lifetime mortgage could be the lifeboat you’ve been searching for.

While we sadly can’t take away your illness, we can guide you on how equity release can make things easier. We’ll help you discover:

  • How a enhanced lifetime mortgage works.
  • The illnesses covered with an enhanced lifetime mortgage.
  • The pros and cons of enhanced lifetime mortgages.

We’ve done a detailed analysis of the market, spent countless hours studying over 220 plans, so we’re in the perfect position to offer you professional advice.

Could an enhanced lifetime mortgage enhance your life? Find out now!

What's an Enhanced Lifetime Mortgage

What’s an Enhanced Lifetime Mortgage?

An enhanced lifetime mortgage is a type of equity release plan that allows you to unlock more cash, with lower interest rates, if you suffer from a health or lifestyle condition. It’s also known as an impaired lifetime mortgage.

Check out the best rates you can get for a lifetime mortgage!

Is an enhanced lifetime mortgage not for you? Check out: Types of Lifetime Mortgage Schemes

The Mechanics of an Enhanced Lifetime Mortgage Plan

How Does an Enhanced Lifetime Mortgage Plan Work?

An enhanced lifetime mortgage works with the homeowner completing a health and lifestyle questionnaire, and if they qualify, the lender will offer them a plan with lower interest rates and maximum equity, based on the severity of your condition. Tax-free cash is released in a lump-sum, drawdown facility, or a combination of both. Finally, the loan, plus interest is only needed to be repaid when you pass away or enter long-term care.

What are the Qualification Criteria

9 Enhanced Lifetime Mortgage Qualification Criteria

If you qualify for the enhanced lifetime mortgage plan4  will depend on your medical history. Should you wish to apply, your provider will offer you an honest health and lifestyle questionnaire.

The following conditions will be considered in Dec 2021:

  • Regular cigarette or rolling tobacco smoking.
  • Having a high body mass index (BMI).
  • High blood pressure.
  • Medical complications such as angina, heart attack, strokes, etc.
  • If you’ve been diagnosed with cancer requiring surgery, chemo, or radiotherapy.
  • Multiple Sclerosis or Parkinsons.
  • Diabetes.
  • If you retired early due to ill health.
  • If you’re on prescription medication.

Fear not!

If your condition isn’t listed, you must still inquire about it with your financial adviser and equity release lender. You might still be able to qualify for an enhanced lifetime mortgage.

What are the Benefits

8 Enhanced Lifetime Mortgage Benefits

An enhanced lifetime mortgage plan allows you to enjoy several benefits, including:

  • It offers you a more significant amount of cash than the standard equity release schemes.
  • It allows lower interest rates than the standard equity release schemes.
  • It’s a completely unique financial product in that it allows you to benefit from poor health records.
  • The equity you unlock can allow you to make some much-needed home modifications if your medical issues are mobility-related.
  • There’s an option for a drawdown facility so you can access cash for big medical expenses, whenever it’s required. Drawdown facilities do come with a minimum withdawal amount.
  • Lenders do not require you to have a medical, in order to qualify.
  • Even after unlocking a larger amount of cash, you’re still safeguarded with the ‘no negative equity guarantee‘.5
  • The questionnaire you complete is simple and straightforward, and the whole process is generally stress-free.
What are the Pitfalls

6 Enhanced Lifetime Mortgage Pitfalls

Like with any other equity release scheme, there must always be a degree of caution. Some of the facts you need to consider:

  • By unlocking the maximum enhanced equity release, you might hand little or no inheritance.
  • The interest rates, in as much as they are minimal, tend to be higher than on conventional standing mortgages.
  • The plans could take longer to set up if your broker requires you to provide a doctor’s report.
  • Taking a more considerable lump sum might affect your entitlement to means-tested benefits.
  • The companies could levy early repayment charges if you decide to settle the plans earlier than intended.

Discover: 8 Pitfalls You Must Know to Release Equity

Which Companies Offer these Mortgage Schemes

Which Companies Offer these Mortgage Schemes?

Equity release companies specialising in the impaired lifetime mortgages plans include, but are not restricted to, Aviva Equity Release, More2Life Equity Release, and Just Equity Release. These brokers offer you higher maximum lump sums for enhanced lifetime mortgages than with their standard terms.

3 plans you could consider in Dec 2021:

How is the Plan Calculated

How Is an Impaired Lifetime Mortgage Plan Calculated?

An impaired lifetime mortgage plan calculation is dependent on the age of the youngest proprietor and the property’s portfolio.  However, if there’s any impairment, the lender will undertake more calculations to ensure you get the highest amount suited to your circumstances.

Try our free online lifetime mortgage calculator and get a better perspective!

In Conclusion

Illness can take a toll on both you and your family. While equity release won’t cure you, it can, at least, give you some comfort during these difficult times.

Therefore, you should contact your professional financial adviser today to see how much equity you can release from your home.

For more information on these plans and more though, be sure to click here and see how much equity you can release and get in touch with an expert free of charge.

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
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Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
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Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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