As part of your research into equity release, you may have heard of "enhanced plans". But what exactly are enhanced equity release plans? And how do you qualify?
In this guide, we explain everything you need to know about enhanced lifetime mortgages.
Medically enhanced lifetime mortgages can give you access to greater cash releases than other types of equity release. You can also obtain lower interest rates than with standard lifetime mortgages.
There are no medicals to attend. Instead, you complete a simple survey that your doctor and prescriptions can support.
In this guide, you will learn:
Lifetime mortgages are the most popular type of equity release. When we discuss enhanced equity release plans, we are referring to medically enhanced lifetime mortgages.
Medically enhanced lifetime mortgages can allow you to access larger maximum releases compared to standard plans.
You might also be able to get a lower interest rate from lenders offering medically underwritten plans.
Importantly, there are no physical medical exams.
Instead, you complete a simple questionnaire, which the lender uses to assess your eligibility and determine how much of an enhancement they will provide.
Once you submit your application, the lender can request your medical history from your doctor to evidence your answers to their questionnaire.
A great way to help speed up the process is to provide prescriptions and letters from your doctor or hospital that also document your conditions.
Equity release works in the opposite way to insurance.
Typically, with insurance, the more health conditions and lifestyle factors you have, the higher your premium will be. With equity release, it works in the opposite direction.
With equity release, the more conditions that you have, the sooner the equity release lender will expect to be repaid.
Therefore, lenders will give you access to more money and lower rates.
When completing your health and lifestyle questionnaire, be as complete and honest as possible.
To check if you qualify for a medically enhanced equity release, you will need to speak with an advisor.
They will ask you questions about your medical history and certain lifestyle factors.
This information is then passed to equity release lenders offering medically enhanced plans to see what enhancements are available.
There are no physicals or medical exams required. Instead, there is a simple questionnaire to complete.
Here are some of the most common questions:
- Do you suffer from any illness requiring daily medication?
- Do you have high blood pressure?
- Do you have diabetes?
- Have you had a heart attack or heart surgery?
- Have you had a stroke or mini stroke?
- Do you require the use of mobility aids?
- Have you had cancer?
- Have you had to retire early due to ill health?
- Have you had an organ transplant or suffer from organ failure?
- Have you been diagnosed with HIV?
Lifestyle questions include:
- Are you a smoker?
- What is your alcohol consumption?
- Weight (in kg):
- Height (in cm):
Lenders use this information to calculate your BMI. A high or low BMI can provide an enhancement.
As you can see, even if you have relatively minor or well-controlled conditions, you can often qualify.
I have spoken with many clients who have medical conditions that are controlled by medication, and still qualify for a medically enhanced equity release!
The amount extra that you can get on a medically enhanced equity release plan depends on the number and severity of your conditions.
Younger applicants often see the largest potential enhancements.
Let's look at the maximum enhancements available based on a £300,000 house:
These figures are examples only. Actual loan-to-value percentages vary by lender, age, and your specific underwriting.
You can also see that at older ages, standard loan-to-value limits are already high, so enhancements may be smaller or may not increase the maximum release.
Ultimately, this is because standard loan-to-value limits rise significantly with age. By your late 70s or 80s, the standard maximum release already assumes a shorter expected term, so medical enhancements tend to make less of a difference to the overall amount available.
Want to see the medical enhancements available to you?
Use our equity release calculator
If you take out an equity release plan with someone else (eg your spouse), you will both need to complete a medical questionnaire.
The age of the youngest borrower and the answers to their health and lifestyle questionnaire usually have the biggest impact on the enhancements that you can achieve.
This is because the loan is repaid when the last borrower passes away or moves into long-term care, and the younger borrower will typically outlive the older applicant.
But even if the youngest person is fit and healthy and doesn't take any medication, you can still qualify for an enhanced plan.
So, even if you think that just the older applicant qualifies, you should both provide your medical details.
The biggest benefits of medically enhanced lifetime mortgages are:
- Potential access to more money
- Potential access to lower interest rates
Even if you don't need more money, you may get a lower interest rate with a medically enhanced plan.
Not all equity release lenders offer medically enhanced plans, so sometimes you can achieve a lower interest rate on standard equity release plans.
Regardless of whether you have a standard or medically enhanced equity release, once the plan is arranged, they run the same:
- The loan continues to accrue interest until fully repaid.
- Equity release may reduce the amount of inheritance you can leave to your beneficiaries.
- Early repayment charges may apply if you want to redeem the loan early.
The lender won't need to request additional reports unless you want more money and have new conditions.
However, because lenders need to check the information provided in your questionnaire, they will often request a report from your GP.
Obtaining a GP's report is the most frustrating part of the process.
Don't worry - the lender handles this on your behalf, and we can also chase the report.
However, you can expect the process to take an additional couple of weeks before you receive your funds.
Want to complete your medically enhanced plan more quickly?
The best way to expedite the process is to provide a copy of your prescriptions, showing the medications you are currently taking.
If you are comfortable doing so, you can also share copies of hospital letters.
For example, you can provide evidence of ongoing treatments, such as chemotherapy appointments.
This can help lenders to validate the information from your questionnaire without needing to contact your GP.
Providing documents is optional, and you should only share documents with which you are comfortable. However, sharing documents can help reduce processing delays.
- Aviva - provides higher releases and lower interest rates
- Just - provides higher releases across their product range
- More2Life - provides a higher maximum release
Each lender has their own specific medical questionnaire, and some of the questions are slightly different.
For example, some require you to have been admitted to a hospital if you had a heart attack, while others don't.
Similarly, some will ask if you have been diagnosed in the last five years, while others will ask if you have ever been diagnosed with certain conditions.
Therefore, you can't assume that your enhancement will be the same across each lender.
As part of our equity release advice, we contact each lender and provide details separately.
Your equity release advisor will consider both standard and medically enhanced equity release plans as part of the advice process.
They will research plans and make their recommendation to you based on your eligibility criteria and needs.
Equity release may not be suitable for everyone. Alternatives such as downsizing, unsecured borrowing, using savings, or help from family members should also be considered as part of your advice process.
Ready to take the next step? Use our equity release calculator to compare plans from across the market.
While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.
To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.
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