Our Product

Our Lifetime mortgage is no longer available to new customers. Existing Lifetime mortgage customers are able to use the future release facility and can apply for a further advance,  transfer of mortgage property (TOMP) and porting for customers wishing to move home. 

See our Lifetime further advance rates (PDF, 70KB)

  • Applicants may apply for a single advance up to the maximum loan to value (LTV) or for an initial advance with a future release facility up to the maximum LTV to draw down further funds at a later date e.g. LTV allows an applicant to borrow £100,000, but they only require £60,000 now. The remaining £40,000 may be drawn down later as part of a ‘future release’. 

    The minimum future release loan amount is £5,000 and the value of the future release cannot be more than 50% of the total facility. For example, if the total facility is £30,000 the maximum the borrower can hold as a future release is £15,000. 

    The future release must be agreed and set up at the point of application for the initial mortgage advance and will be subject to property and borrower qualifying criteria both at the point the facility is arranged and when the borrower applies to draw down the funds. 

     Daily interest will be applied and rolled-up from the date funds are taken, meaning interest will not be charged on a future release until it is drawn down. ERCs will apply for ten years from completion of each new future release, as detailed in the Early Repayment Charges section e.g. the borrower takes an initial lump sum in January 2020 and a future release in January 2025. When the future release completes, there will be a five year ERC period remaining on the initial lump sum and a new ten year ERC period remaining on  the future release. 

    At the time of a future release we will re-assess the borrower’s LTV position to ensure the new borrowing does not cause the LTV to exceed the maximum we would lend to a new applicant of the same age . This will be calculated taking into consideration: 

    • The existing mortgage balance 
    • The new borrowing amount 
    • Our assessment of the property value 

    The outcome of this assessment could impact on the total amount of future release actually allowable. 

    The borrower must apply directly to Scottish Widows Bank to request a future release. The borrower will be asked to confirm that the reason for the request aligns to what was discussed and agreed with their mortgage advisor. Therefore, it is important they retain the recommendation letter provided to them by their mortgage advisor, or obtain a copy from their mortgage advisor prior to submitting a future release application to us. A credit search will be carried out to check for bankruptcy or any other serious credit issue, such as County Court Judgements. 

    As a responsible lender, if we suspect fraud, believe the borrower is vulnerable, or if their circumstances have changed e.g. adverse credit or different borrowing requirements, we may suspend access to their future release facility and refer the borrower back to their mortgage advisor to validate the original advice. If the future release application is successful, funds will be released directly to the borrower’s nominated bank account upon completion. 

  • At the time of a further advance we will re-assess the borrower’s LTV position. This will be calculated taking into consideration: 

    • The existing mortgage balance 
    • The new borrowing amount 
    • An additional 90 days interest ‘buffer’ to take into account that the Lifetime Mortgage balance is going up each day with interest 
    • Our assessment of the property value (including any existing ring fenced %) a full valuation will be required, this will be arranged by SWB but payable by the customer​  

    Interest will be calculated daily, applied to the loan monthly and rolled-up from the date funds are taken. 

    Early Repayment Charges will apply to a Further Advance.  A new Early Repayment Charge (ERC) period will start from completion of the Further Advance, as detailed in the Early Repayment Charges section of this guide e.g. where a 10 year ERC period applies, the borrower takes an initial lump sum in January 2020 and a Further Advance in January 2025. When the Further Advance completes, there will be a five year ERC period remaining on the initial lump sum and a new ten year ERC period remaining on the Further Advance.  

    Please see Early Repayment Charges section. 

    Further advance illustrations are valid for 15 days. If an application has not been submitted and it is more than 15 days since the illustration was created a new application would need to be started.  

    Once a full application has been submitted there will be a 30 day period to proceed to offer, after this time we will advise you to key a new illustration.  

    Once an offer has been issued, the customer has 45 days to complete; if this timescale is exceeded we will advise you that a new application will need to be keyed.  

    Eligibility 

    Customers can apply for a Further Advance following the 12 month anniversary of opening their lifetime mortgage and subject to our lending criteria.  

    Customers can apply for subsequent Further Advances six months following completion of their previous Further Advance.​​ 

    Where some or all of the proceeds of the Further Advance are being used for debt consolidation, this is not acceptable if the original Lifetime Mortgage or any subsequent loans included debt consolidation in the last five years.  

    The borrower can get advice and apply through a Lifetime Mortgage Adviser or directly through Scottish Widows Bank. As a responsible lender, a full credit check will be carried out as part of the application process. If we suspect fraud, financial difficulties or suspected coercion we may decline any Further Advance. A physical valuation of the property will be required, this will be arranged by us and paid for by the borrower.

    If the Further Advance application is successful, you may need to seek further independent legal advice before we release the funds which will be sent directly to the borrower’s bank account we hold on file. If the borrower would like funds released to alternative bank details these must be amended and verified prior to the application being submitted.

    Independent Legal Advice  

    Customers will require independent legal advice in the following circumstances: 

    • Their ringfenced % is being amended 
    • A Power of Attorney has been added and the Attorney has not previously had independent legal advice on the Lifetime Mortgage.  

    Advisers should consider if customers require independent legal advice when there’s been any significant changes to the customer’s circumstances for example one or more of the following: 

    • The death of one party 
    • A move to another property 
    • Divorce and/or remarriage or co-habitation
    • A member of the family, friend or a companion coming to live with the customer  
    • Any significant change to the customer’s physical or mental health
    • A family member or professional carer attending regularly to give care, or living in the property and what, if any, access to/control over the customer’s financial affairs such a person might have
    • Any other issues which could affect the customer’s circumstances or capacity which may not be addressed sufficiently by the financial advice which will be given in connection with the further advance.  

    If independent legal advice is deemed necessary this must be obtained prior to completion and paid for by the customer. 

  • Acceptable loan purposes

    Accepted

    Not accepted

    Accepted

    Consolidating my debts

    Not accepted

    • Loan and Credit Card debt 
    • Payday loans 
    • Student loans 

    Accepted

    Helping Friends and Family (Cash Gift) 

    Not accepted

    • Cash gift as lump sum 
    • Use towards a current or new business venture/ investment where the applicant holds an interest in the business/investment (direct or otherwise) 
    • A repayable loan (it must be a gift) 
    • Use towards assets which remain in applicant’s name 
    • Illegal, speculative or gambling purposes 

    Accepted

    Property Modifications

    Not accepted

    • Minor modifications made to your existing main residential property, subject to a valuation  
    • Modifications made to other properties (as long as the funding is being taken from main place of residence) 
    • Essential repairs on any property owned by borrower 
    • Any Property Modifications that may take the customer’s property into our Unacceptable Property Types (see Property Criteria section)  

    Accepted

    My Lifestyle 

    Not accepted

    • Leisure e.g. holidays 
    • Milestone purchases e.g. new car, holiday home 
    • Repay existing mortgage secured on an additional property e.g. buy-to-let (BTL). This is only available where there are no existing secured charges on the customer’s main residence or these are repaid by this Lifetime mortgage which, will be registered against the customer’s main residence 
    • Purchase of a new buy-to-let (BTL) in borrower’s name and not a special purpose vehicle (SPV). This is only available where there are no existing secured charges on the customer’s main residence or these are repaid by this Lifetime mortgage which, will be registered against the customer’s main residence 
    • Medical bills 
    • Timeshare purchase 
    • Use towards a current or new business venture / investment where the applicant holds an interest in the business / investment (direct or otherwise) 
    • Illegal, speculative or gambling purposes 

    Accepted

    Other Non-Acceptable Reasons

    Not accepted

    • When the ownership of property is less than 6 months 
    • due to inheritance of the property
    • due to the death of the previous property owner 
    • Where the applicant is seeking to borrow against a property which they acquired less than 6 months ago, except where they inherited the property following the death of the previous owner 
    • Where the applicant has not met the Property Criteria 
    • Where the use of the money results in the Property Criteria subsequently not being met 
  • Rates are fixed for the life of the mortgage. The rate of interest payable will be dependent on the age of the applicant(s) and the LTV banding the applicant(s) qualify for. For joint applications, it will be dependent on the age of the youngest applicant. 

    Applicants will have 30 days from submitting a full application to progress to Offer in order to qualify for  the illustrated product rate. The Offer will be withdrawn by Scottish Widows Bank if not completed within 45 days of the Offer date.  In the event either timescale is exceeded, we will refer the applicant back to their mortgage advisor. Their chosen product may no longer be available meaning a new product may need to be selected from the range available at that time. 

    The rate of interest payable on each future release taken will be the prevailing interest rate determined at the point of each release. The rate will depend on the age of the youngest borrower and the LTV banding the borrower qualifies for at that point in time. 

  • The maximum LTV will be dependent on the age of the applicant(s). For joint applications, it will be dependent on the age of the youngest applicant. 

    • ERC’s are only applicable to the original capital balance of each sub account, not accrued interest. A new ten year ERC period will apply on completion of each Future Release and Further Advance sub account. After the mortgage term of each sub account has been running for ten years an ERC will no longer apply. 
    • If the borrower has taken advantage of the option to make 10% overpayments, this will be taken into account when calculating ERCs as a reduction to the capital balance. 

    Please see the table below for details: 
     

    Early repayment charges table

    ERC Year

    ERC Rate

    Start Month

    End Month

    ERC Year

    1

    ERC Rate

    10%

    Start Month

    1

    End Month

    12

    ERC Year

    2

    ERC Rate

    9%

    Start Month

    13

    End Month

    24

    ERC Year

    3

    ERC Rate

    8%

    Start Month

    25

    End Month

    36

    ERC Year

    4

    ERC Rate

    7%

    Start Month

    37

    End Month

    48

    ERC Year

    5

    ERC Rate

    6%

    Start Month

    49

    End Month

    60

    ERC Year

    6

    ERC Rate

    5%

    Start Month

    61

    End Month

    72

    ERC Year

    7

    ERC Rate

    4%

    Start Month

    73

    End Month

    84

    ERC Year

    8

    ERC Rate

    3%

    Start Month

    85

    End Month

    96

    ERC Year

    9

    ERC Rate

    2%

    Start Month

    97

    End Month

    108

    ERC Year

    10

    ERC Rate

    1%

    Start Month

    109

    End Month

    120

    ERC Year

    11+

    ERC Rate

    N/A

    Start Month

    121

    End Month

    N/A


    In some circumstances, e.g. when porting, or where a borrower has moved into long term care, ERCs will not apply. Please refer to the Mortgage Illustration for details of any ERCs that apply. 

  • One payment of a maximum of 10% of the capital balance, not including interest, can be repaid by the borrower each mortgage year without incurring an ERC.  

    If the mortgage has multiple parts (sub accounts), these limits will apply to each sub account separately.  The borrower must tell us which sub account they want to pay into. If they exceed the 10% limit or make more than one payment per mortgage year to the same sub account they may be charged an ERC. 

     e.g. if the sub account balances are: 

    • Sub account 1 = £30,000 
    • Sub account 2 = £20,000 

     A maximum of £5,000 can be paid. This would need  to be individual payments of: 

    • No more than £3,000 to sub account 1 
    • No more than £2,000 to sub account 2 

    If the borrower paid the full £5,000 to sub account 1 we would not automatically transfer any of this to sub account 2 and the borrower would incur an ERC on the £2,000. 

  • Borrowers may transfer the Lifetime mortgage product to an alternative property, with no increase in the rate of interest. A partial repayment may be required to ensure the LTV on the new property does not exceed the higher of the following: 

    • the LTV on the existing property, or; 
    • the maximum LTV we would lend a new applicant in similar circumstances. 

    No ERC or similar charge will be made in respect of any such partial repayment. However, we may charge the borrower(s) reasonable costs and expenses for transferring the Lifetime mortgage product to the alternative property, such as carrying out an inspection on the property to assess its suitability based on our lending criteria. We may decline the application if the property is not suitable.  

  • The mortgage term end date is for illustration only and interest will continue to accrue after this date until the loan is repaid. The loan must be repaid no later than 12 months after either: 

    • The death of the borrower(s) (the last surviving borrower for joint mortgages). 
    • The borrower(s) move in to long term care or sheltered accommodation (the last remaining borrower for joint mortgages). 

    If the property ceases to be the borrower’s main residence for any other reason, the loan must be repaid. This applies to the last remaining borrower. 

  • The mortgage is usually repaid through the eventual sale of the property. This could happen in the following ways: 

    •  Death of the borrower (the last surviving borrower for joint mortgages) 
    •  Movement of the borrower in to long term care or sheltered accommodation (the last remaining borrower for joint mortgages) 
    •  If the property ceases to be the borrower’s main residence for any other reason 
    • Voluntary surrender of the keys may be possible, if beneficiaries do not wish to be involved in the sale of the property. 

    Repayment of the mortgage in the following ways is also acceptable: 

    • Voluntary repayment of the mortgage through capital repayments made by the borrower(s) (ERCs may apply) 
    • Repayment of the mortgage by the borrower’s executors or beneficiaries following the death  of the borrower(s) if the beneficiaries wish to keep the property (ERCs may apply) 
    • Repayment through a remortgage to another lender (ERCs may apply)
  • Our Lifetime mortgage comes with a No Negative Equity Guarantee (NNEG) ensuring the borrower will never have to repay more than the open market sale proceeds of the property when the loan is repaid following the death of the borrower(s) (the last surviving borrower for joint mortgages) or the borrower(s) move in to long term care or sheltered accommodation (the last remaining borrower for joint mortgages).There are some circumstances where the NNEG would not apply. These will be set out in the Lifetime mortgage Offer document. 

  • Borrowers can choose to ‘ring-fence’ a percentage of their property value to guarantee they or their beneficiaries will receive that percentage of the eventual sale proceeds. 

  • Borrowers will have the right to remain in the property for life or until they need to move in to long term care or sheltered accommodation provided the property remains their main residence (the last remaining borrower for joint mortgages). 

  • Lifetime mortgage or future release applications from an applicant with power of attorney will not be accepted. A power of attorney may be added after completion to help administer the account, however, the borrower’s attorney will be unable to apply for future releases or any other further borrowing.