A lifetime mortgage is a loan secured against your home: you keep ownership, but a rolled-up balance can grow with interest. Home reversion means selling all or part of your home to a provider, usually for less than market value; you give up ownership of the share sold but may continue living there under the plan’s tenancy terms. Neither is automatically better. The right comparison depends on your personalised offers, future plans and what you want your estate to retain.
How the plans differ
| Question | Lifetime mortgage | Home reversion |
|---|---|---|
| What happens to ownership? | You borrow against the property and remain its owner. | You sell all or an agreed share of the property to the provider and no longer own that share. |
| How does the amount given up grow? | If interest is rolled up, it compounds on the growing loan balance. | No mortgage interest accrues on the share sold, but you give up that share’s future increase in value. |
| How can you receive money? | Depending on the product, as a lump sum or through drawdown; some plans allow voluntary interest or capital payments. | As a lump sum or, with some plans, in smaller sums over time. Options depend on the provider and contract. |
| What happens when the home is sold? | The loan is normally repaid from the sale after the last borrower dies or moves permanently into long-term care, subject to the contract. | The provider receives the sale proceeds for the share it bought; you or your estate retain the proceeds attributable to the remaining share. |
MoneyHelper says lifetime-mortgage minimum ages are set by providers and are typically 50 to 55; the home must be the applicant’s main residence. Its general equity-release overview describes homeowners aged 55 and over as the usual audience. These are indicative descriptions, not eligibility guarantees. Some home-reversion providers may require applicants to be over 60 or 65, own the home outright and meet a minimum property value, typically £70,000; criteria vary. MoneyHelper: lifetime mortgages and MoneyHelper: home reversion explain the respective plan types.
What you may receive—and what you give up
Lifetime mortgage: ownership, with a growing debt if interest is rolled up
You retain ownership of the home. If you choose a plan that adds interest to the loan rather than requiring payments as it accrues, each period’s interest is charged on an enlarged balance. Borrowing earlier can therefore give interest more time to accumulate, and the amount eventually repaid can be substantially greater than the original advance. Some products permit voluntary payments, but the contract governs whether and how these can be made. MoneyHelper’s guide gives £1,500 to £3,000 as an indicative range for fees to release equity; actual costs vary and should be confirmed in the current offer. See MoneyHelper’s lifetime-mortgage guide.
Home reversion: no debt on the share sold, but no future growth from it
The provider buys an agreed part or all of the property. MoneyHelper says offers are usually 20% to 60% of market value and may vary with the applicant’s age; this is an indicative guide, not a quote. The offer is generally below the market value of the share, and you give up that share’s future growth. In return, there is no mortgage balance accumulating compound interest against the share sold. The contract determines your right to occupy the property and any ongoing obligations. See MoneyHelper’s home-reversion guide.
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What happens to your home and inheritance?
With a lifetime mortgage, you remain the owner, but the debt and any accrued interest are paid from the property sale under the contract. The amount left for your estate depends on the eventual sale proceeds and loan balance. With home reversion, the provider is entitled to the proceeds for the share it bought; your estate retains only the portion attributable to the share you kept, after any other obligations. In either case, the result depends on the terms and what happens to property values, borrowing, and the household’s circumstances.
Ask for projections that show the likely effect on your estate under different time horizons and property values. A lifetime-mortgage illustration should make the loan growth clear; for home reversion, ask how the provider’s share of eventual sale proceeds is calculated. Do not compare only the cash offered today: compare what each arrangement leaves you with and the conditions attached to living in the home.
Moving, care and plan protections
For a lifetime mortgage, repayment is normally due when the last borrower dies or permanently moves into long-term care, but the contract defines the trigger and any options. Ask whether you can transfer the loan to another property and what happens if the new home does not meet the provider’s criteria. Early repayment charges may apply.
Home reversion is based on a tenancy arrangement that can allow you to stay for life or until moving into care, subject to its terms. Before signing, establish what counts as a move into care, whether you can move to another home, and whether the plan can transfer. Ask about ongoing rent, ground rent, insurance, repairs and maintenance, as applicable, and the consequences of failing to meet any tenancy obligation.
Equity Release Council standards include a right to remain in the home for life or until moving into care. For relevant lifetime mortgages, standards also include fixed or capped interest and a no-negative-equity guarantee. Check whether the specific product complies and what the contract says. MoneyHelper says most Council-backed lifetime mortgages have a no-negative-equity guarantee and that borrowers must be told if a plan does not. A move to a different property can depend on the provider accepting the new home. Equity Release Council consumer information and MoneyHelper’s equity-release overview describe these protections.
Costs and effects beyond the property
Request a complete schedule of costs, not just an interest rate or cash offer. Depending on the plan, costs can include advice, arrangement, valuation and legal fees. A lifetime mortgage may have early repayment charges. A home-reversion plan can include ongoing insurance, repairs, maintenance, ground rent or rent costs. Check which costs recur, which are one-off, and whether any apply if you move or end the arrangement.
Either type of equity release may affect means-tested benefits, grants, local-authority care support, tax or future choices. The outcome depends on your circumstances, so ask an adviser to assess your own position rather than assuming that a particular benefit will or will not change. Age UK’s Factsheet 65, February 2026 recommends considering benefits and tax, alternatives, estate preferences, health and life expectancy, future plans, payment stability and fees.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Check alternatives before deciding
Equity release is not the only way to raise money from housing or income. Depending on your circumstances, consider whether any of these could meet the need with fewer long-term constraints:
- A mainstream mortgage or further advance.
- A retirement interest-only mortgage.
- A personal loan.
- Help from family.
- Taking in a lodger.
- Grants or other support that may be available for your situation.
These options also have eligibility rules and costs; compare them on their own terms. The Equity Release Council’s consumer guidance lists alternatives, while Age UK’s February 2026 factsheet discusses grants and further mortgage advances where relevant.
How to compare personalised offers
- Define the need. Decide how much money you need, when you need it and whether a one-off sum or staged access better fits your plans.
- Compare the full documents. For a lifetime mortgage, MoneyHelper says the adviser provides a personal recommendation and Key Facts Illustration. For home reversion, the Equity Release Council describes a home-reversion-plan illustration. Read the formal documents for costs, risks, repayment or tenancy conditions and possible early-repayment charges.
- Ask about advice and eligibility. Find out whether the adviser searches the whole market, how they are paid, which providers and products you qualify for, and whether the provider’s offer is conditional on valuation or other checks.
- Test future scenarios. Ask what happens if you move, need care, want to make payments, or your circumstances change. For home reversion, ask how tenancy, ongoing costs, transfers and any staged payments or later share sales work.
- Check wider consequences. Ask for an assessment of potential effects on benefits, tax, care support and your estate, based on your own circumstances.
- Get independent legal advice. The process described by MoneyHelper and the Equity Release Council includes legal advice; make sure you understand the obligations before committing.
- Verify the firm. The FCA regulates equity-release schemes. Check any adviser or provider using the FCA Firm Checker and confirm the firm is authorised for the service it is offering.
MoneyHelper’s consumer guidance says: “Before deciding, you must speak to an equity release specialist about the risks or discuss other options with a mortgage adviser.” Read the full guidance. Fees, eligibility and product terms change; use current personalised illustrations and legal documents rather than assuming a general figure applies to your case.
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