If you’re over 55 and thinking about moving to a new home in later life, you might be wondering what your mortgage options are.

For some, a lifetime mortgage in Cambridge could provide a flexible way to purchase a property without the need for traditional monthly repayments. While often used to release equity from an existing home, a lifetime mortgage can also be used to help fund the purchase of a new one.

In this guide, we’ll explain how buying a home with a lifetime mortgage works, who it may be suitable for, and what to keep in mind if you’re considering this route to homeownership.

Can you buy a house with a lifetime mortgage in Cambridge?

Yes, it is possible to buy a property using a lifetime mortgage in Cambridge, though it’s less common than using one to release equity from your current home.

This approach is known as a “home purchase plan” under the umbrella of lifetime mortgages and is designed for those over 55 who want to move in later life without committing to traditional monthly repayments.

It allows you to secure a new home while keeping ownership and freeing up cash for other purposes.

How does using a lifetime mortgage to buy a property work?

The process involves taking out a lifetime mortgage against your new home, with the borrowed amount used to fund all or part of the property purchase.

You’ll still need a cash deposit, which often comes from the sale of your current home or existing savings.

The loan is secured against the new property and repaid from the sale of the home when you pass away or move into long-term care.

Since there are no mandatory monthly payments, this option can provide peace of mind for those on a fixed retirement income.

Who is eligible to use a lifetime mortgage for a home purchase?

To qualify for a lifetime mortgage in Cambridge, you’ll usually need to be at least 55 and purchasing a property that meets the lender’s criteria in terms of value and condition.

The amount you can borrow depends on your age, health, and the value of the home you wish to buy.

You’ll also need to demonstrate that the property will be your main residence, and some lenders may require proof that you understand the long-term implications of a lifetime mortgage.

What are the benefits of using a lifetime mortgage to buy a home?

Using a lifetime mortgage in Cambridge to buy a home offers flexibility and security, especially for those in later life.

Whether you’re downsizing, relocating or buying closer to family, they allow you to move into a more suitable property without taking on the financial pressure of monthly mortgage repayments.

You also retain full ownership of your home, which can provide a sense of stability and control over your living arrangements in retirement.

Are there any drawbacks to consider?

There are important factors to weigh up with lifetime mortgages in Cambridge. Interest on a lifetime mortgage compounds over time, meaning the total amount owed can grow significantly if no repayments are made.

This may reduce the value of your estate and impact the inheritance you leave behind. In addition, not all properties are eligible, and you may be limited in the type of home you can purchase using this method.

It’s also vital to understand how it could affect any means-tested benefits you receive.

How much can I borrow with a lifetime mortgage in Cambridge?

The amount you can borrow typically depends on your age, the property’s value, and your health.

Generally, the older you are, the more you can borrow, with some lenders offering higher loan-to-value ratios for those in their late 70s or 80s.

In some cases, enhanced plans may offer more favourable terms if you have certain health conditions.

Speaking with a specialist mortgage advisor in Cambridge can help you understand how much you may be eligible to borrow in your circumstances.

Do I need to make repayments on a lifetime mortgage?

Most lifetime mortgages don’t require monthly repayments, although some plans allow for voluntary payments to manage the interest.

If you choose not to make payments, the interest is added to the total loan balance and repaid when the home is sold.

If you prefer, you can choose a plan with the option to pay the interest regularly, helping to reduce the impact on your estate later on.

Is a lifetime mortgage the right option for me?

A lifetime mortgage in Cambridge can be a good option if you’re looking to buy a new home in later life without taking on regular repayments.

It may suit those who are downsizing, moving closer to family, or seeking a home more suited to their needs.

That said, it’s not right for everyone. It’s important to consider how this type of borrowing will affect your long-term finances, estate planning, and any benefits you receive.

How can a mortgage broker in Cambridge help?

A mortgage broker in Cambridge like us can help you navigate the lifetime mortgage process, ensuring you understand how it works and whether it suits your goals.

We can assess your eligibility, compare available plans, and connect you with lenders offering competitive products tailored for home purchase.

With the right advice and support, you can move forward confidently and find a mortgage solution that fits your retirement lifestyle.

Date Last Edited: April 8, 2025