Medical History Impacting Enhanced Lifetime Mortgages & in 2022

Do You Want to Understand the Impact of Your Medical History on Enhanced Lifetime Mortgages?
Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui
Do You Want to Know the Impact of Your Medical History on Enhanced Lifetime Mortgages? Find Out What to Consider Before Taking Out Enhanced Terms & the Costs of an Enhanced Lifetime Mortgage. Get the Answers You Need Here.

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Did you know that your medical history can enhance your lifetime mortgage?

While we all want to be healthy in our golden years, this, unfortunately, isn’t the case for all.

What You’ll Learn in This Article:

    Let’s take a look at how your medical history can affect the amount of equity release available to you and why this is so important.

    Let’s find out now!

    What are Enhanced Lifetime Mortgages?

    If you have a medical condition and would like to pursue an equity release, you may be eligible for an enhanced lifetime mortgage with a reduced term.

    This means that you can have access to more can than someone who doesn’t suffer from any medical conditions, as your life expectancy is possibly shorter.

    Suppose you have a life expectancy of 15 years or less, and suffer from a severe illness like cancer, your equity release term could be reduced to just ten years.

    This is compared to someone who has no medical conditions and can expect their lifetime mortgage term to last a lot longer, as general life expectancy is up until 80-years-old.

    It’s essential that we understand how our medical history1 impacts the amount of equity release available.

    Several factors affect the calculation, including age and life expectancy, as well as any medical conditions you may have.

    However, the good news is that this doesn’t restrict your choice when it comes to taking out an equity release.

    There’s even more opportunity for those who’ve had surgery or suffer from serious illness!

    Perhaps this is a light in a very dark tunnel?

    4 Equity Release Providers That Offer Enhanced Lifetime Mortgage Plans

    • More2Life
    • Just Retirement
    • Age Partnership
    • Aviva

    The More2Life offer is quite different from the others.

    They’re a specialist provider for those looking at retirement and have already achieved their lifetime mortgage requirements.

    Just Retirement offers lifetime mortgage rates to those who’ve suffered any type of surgery or have a severe illness.

    Age Partnership offers enhanced rates for anyone over the age of 62 with an interest in equity release.

    Meanwhile, Aviva offers its rate to anyone aged 55-65 looking at retirement.

    12 Common Health Factors Considered for an Enhanced Lifetime Mortgage

    These factors are considered for an enhanced lifetime mortgage on top of the standard requirements for equity release.

    You’ll need to fill out a health and lifestyle questionnaire to assess your eligibility2.

    Many qualifying impaired health conditions apply across all lenders, including:

    • Height and weight
    • Smoking details
    • High blood pressure
    • Heart attack
    • Diabetes
    • Stroke
    • Angina
    • Cancer
    • Parkinson’s Disease3
    • Multiple Sclerosis4
    • Early retirement due to ill health
    • Even whether prescription medication is being taken

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    3 Qualifying Criteria for an Enhanced Equity Release

    There are several qualifying criteria for an enhanced equity release which include:

    • Being aged 62 or over on the date that you apply.
    • Having at least 25% equity in your home (you may have more than 25% if there is a spouse who owns part of the property).
    • Living in your residence.

    You’ll need to provide a copy of your medical records and your spouse’s, if applicable.

    You may be able to get this information from your general practitioner5 (GP) or hospital consultants, but it’s worth asking the lenders, too, as they might have copies on file.

    Your financial adviser can also help you with any questions about whether you meet the criteria for enhanced equity release mortgage qualification.

    If these conditions are met, then there could be up to 55% more available funds than those who do not meet these criteria.

    This means that in some cases, people aged 65-70 (depending on how much home equity they already own) could borrow £120k instead of just £80k!

    However, it’s essential for those who don’t meet these criteria to remember that they could still borrow £80k, depending on how much equity is tied up in your home.

    How Advantageous is an Enhancement?

    With an enhanced equity release plan, you can borrow a lot more than you can with an ordinary equity release.

    In most cases, people get around 55% more cash from an enhancement.

    This means that you could access up to £40,000 more in equity release funds (dependent on your circumstances).

    However, there are some exceptions, such as if your home is worth less than £60K, or your partner passed away, then this would not apply to you.

    You would only receive an amount that matches what can be borrowed without any enhancements in place.

    This may mean that they would need to use different methods of maximizing the amount of tax-free cash available, such as taking out a reverse mortgage or selling the property and renting instead.

    However, these options come with inherent risks, so it is essential to be aware before deciding how best to fund your retirement years (or if you have already purchased a home).

    If you have additional medical expenses but are cash strapped, you could use the cash you release to provide yourself with the best possible medical support on the market.

    In addition, illness can be challenging. Releasing equity could help give you comforts to make your journey smoother.

    Get inspiration from: 12 Inspirational Equity Release Uses

    Will I Need to Have a Medical Assessment?

    If you’re over 65 and looking to remortgage your property, then lenders will need medical documentation.

    This means that they want proof of age, a statement from the GP or another medical professional such as an optometrist6 confirming sight tests have been conducted recently.

    These check-ups must be no more than three years old.

    How Do I Find Out if I Qualify for Enhanced Terms?

    You should talk to a qualified equity release specialist. They will make recommendations accordingly.

    Equity Release Specialists are regulated by the Financial Conduct Authority (FCA7) and can only discuss all the options with you.

    You can find an equity release specialist in your area on the Equity Release Council’s website8

    This is free of charge and will include their contact details, qualifications, and how long they’ve been working as an equity release adviser.

    Common Questions

    Will I Lose the Equity in My House if I Get Enhanced Terms?

    What Should I Consider Before Taking Out Enhanced Terms?

    What Happens if I Go Over My Maximum Amount?

    How Much Does It Cost to Set Up an Enhanced Lifetime Mortgage?

    In Conclusion

    It’s important to know that various factors can affect the maximum equity release.

    Each borrower’s medical history and financial situation are unique, so they need to speak with their lender about what will work best to get the most out of this type of loan.

    In addition, you can try out one of our equity release calculators to get a sense of how much cash is tied up in your home!

    You might be able to complete your bucket list in your remaining days if your medical history qualifies you for an enhanced lifetime mortgage.

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