Despite growing awareness of later life lending, outdated assumptions continue to shape client conversations and put people off exploring their options. Levi Culshaw, later life proposition manager at Mortgage Advice Bureau, addresses five of the most persistent myths still circulating around later life lending and explains what customers need to know.
1. Myth: A lifetime mortgage is the only route available once you're near or in retirement
Many people assume that once they hit the age where they’re at or nearing retirement, a standard mortgage becomes entirely off the table. In reality, age itself isn't usually the deciding factor - it's whether you're still working and what your income looks like. Someone who’s employed in their 60s will more than likely have a wider range of standard mortgage options open to them than they'd expect, while a lifetime mortgage becomes more relevant once income reduces in retirement. In other words, don't assume the door's closed before you've actually explored what's available.
2. Myth: Later life lending is too expensive
Cost is one of the biggest barriers to people even having the conversation about later life lending. It’s important to be clear on what you need the funds for and let that shape how much you borrow, rather than assuming the vast majority of your options are priced out of reach. The rate you end up with depends heavily on how much you borrow. Ensuring you borrow only what you actually need - rather than the maximum available - can make a significant difference to the overall cost.
Lenders also offer discounted interest rates for customers who commit to making regular payments towards a lifetime mortgage, typically from a minimum of £25 a month. The exact discount and criteria vary by lender and product, so it's worth discussing with clients whether they meet the requirements and how much it could reduce the overall cost of borrowing in their specific circumstances.
3. Myth: Your family will be left with the debt and/or no inheritance
When it comes to inheritance, any remaining equity in the property still goes to that individual’s estate, especially if voluntary payments are made along the way. This means customers retain a meaningful degree of control over what's ultimately left behind, rather than disappearing by default. In terms of the debt itself, families are given 12 months from the point of death or entering long-term care to decide how to proceed, whether that's selling the property, repaying the debt through other means or, less commonly, refinancing to keep the home in the family. Crucially, as long as the property is sold and the debt settled through one of these routes, the family is never left to cover any shortfall personally.
4. Myth: You'll no longer own your own home
A common misconception is that taking out a lifetime mortgage means signing away ownership of the property, or handing some form of financial control to the lender. In fact, homeowners retain full legal ownership throughout: the lender simply places a charge against the property, similar to a standard mortgage, which is repaid once the home is eventually sold. The homeowner can continue to live in the property for as long as they wish, make decisions about it as they normally would, and it remains entirely theirs on paper, just as before taking out the plan.
5. Myth: You can't move house once you've taken out a lifetime mortgage
People assume that once you’ve taken out a lifetime mortgage, you're tied to that property for good, regardless of your circumstances changing. That's actually not the case: one of the Equity Release Council’s guarantees is that you can transfer the mortgage to a new property, provided it meets the lender's criteria at the time. This gives homeowners the flexibility to downsize, relocate, or move closer to family later in life, all without losing the plan they've already set up or being forced to repay it early. It's a level of flexibility many people don't expect from a product they assume locks them into one address for the rest of their life.
