Can you transfer a lifetime mortgage to another lender? Not as the same loan: a new plan repays the old one, and an early repayment charge may apply.

People who ask whether they can transfer a lifetime mortgage usually want a better rate or a lender they trust more. What decides whether that is worth doing is the price of leaving the plan you have. An FCA-authorised adviser, equity release qualified, can price that for your own plan: prospective switchers complete the form on this page; callbacks cost nothing.

Can you transfer a lifetime mortgage to another lender?

Not by handing the same loan across. Changing lender is treated as replacing a plan: you take out a new one, which clears the old. The Equity Release Council, whose rules bind its adviser and provider members, advises in its guidance that a review of an existing plan should weigh up "any early repayment penalties for replacing the existing plan" and says that "any re-finance of an equity release plan should take account of the fees and charges involved". Whether a particular lender will take on a borrower from elsewhere, and at what rate, is that lender's decision at the time.

Taking your existing plan with you to a different house is another matter, and a standard that Council members follow gives you the option to do so, subject to the lender’s criteria at the time of the move; moving house with equity release covers it, and the FAQ below gives the short version. Tax-free cash, repayment by selling the home and the rest of the basics are in our guide to how equity release works.

What leaving your current lender can cost

The cost is the early repayment charge. Aviva puts the reason plainly: "If a loan is repaid early we may need to recover our costs." Lenders work it out in two main ways, and the way is fixed when the plan starts: Aviva says that once a mortgage has completed, "the type of early repayment charge chosen can’t be changed".

With a fixed percentage, the charge is a share of the loan plus the interest added so far, falling as the years pass. Aviva’s booklet for customers who applied after 21 October 2021 shows an illustrative table running from 9% in years one and two down to 1% in year ten and nothing from year eleven. It adds that the offer document for your own loan is what applies.

A gilt-linked charge moves with the market. Aviva’s gilt index version charges nothing if the index’s redemption yield is the same or higher than when your loan completed, but if the yield "has fallen by 0.125% or more" a charge is made unless one of the exemptions Aviva lists applies, and it “won’t be more than 25% of the total amount you’ve borrowed”.

These are one lender’s terms and not a rule for every plan: LV= notes that each product has its own terms on how much you can pay back and on fees. The mechanics, and how a charge is calculated, are in repaying equity release early, so only the points that matter for a switch are here.

When the charge is waived, and what that means for a switch

Lenders waive the charge in set situations that follow a life event. Council standards require the lender to waive the charge for a customer who permanently moves into long-term care and supplies a medical practitioner’s certificate; the borrower must also have kept to the loan’s terms. Aviva also describes downsizing protection: no charge if your plan and circumstances qualify, for people who applied on or after 8 April 2019 and have held the mortgage for at least three years, on its terms and conditions.

Waivers like these follow life events: going into care or, with Aviva, a move covered by downsizing protection. Choosing to leave for another lender is a different step. Whether your own plan treats it differently depends on its wording. Your own plan’s terms settle that point, and an adviser can go through them by phone once you send the enquiry form.

When switching saves money and when charges wipe it out

Nothing here says a switch is right or wrong; it sets out what to put side by side.

  • The exit charge in pounds. Ask your lender for the figure for the day you would repay, not a percentage. It can differ for each sum you borrowed, because Aviva, for one, treats each loan amount separately by its own start date.
  • The rate you would swap into. Council standards require the rate to be fixed or, if variable, to have a fixed cap, in either case for the life of the loan. Equity release interest rates explains what drives the price, and the new rate has to beat both your exit charge and the new set-up costs.
  • The new plan’s set-up costs. A replacement brings its own fees and charges, which the Council expects an adviser to take into account; equity release fees lists them.
  • The new plan’s own charge. LV= says fixed repayment charges are set at the point you take out the product, so a replacement starts its own clock and you may be tied in again.
  • Features lost or gained. The Council asks advisers to consider new features that might suit you and existing ones that might no longer be suitable, such as downsizing protection you already qualify for.

A saving on the interest rate can be wiped out by a high early repayment charge in the first years of a plan. Unpaid interest rolls up, which LV= says can make what you owe grow quickly. The same switch can look different later on, once the charge has stepped down or ended. Whichever way it falls, a smaller estate for your family is a separate trade-off (see inheritance), as is any effect on means-tested benefits (see benefits). Your exit charge, the new rate and the new costs can all be checked in one conversation, and sending this page’s enquiry form arranges the call.

Advice and legal work on a replacement plan

Replacing a plan is advised in the same way as taking one out. The Council’s rules say provider members must sell on an advised basis with a personal recommendation, and that the written advice should explain "why replacing the existing plan was deemed appropriate". These are standards members follow, not a law covering every firm. The Council also states: "All customers who take out equity release need to receive independent legal advice." Why you need a solicitor explains the role.

Scottish homeowners should know that a lender’s security there is a standard security, created by the 1970 Conveyancing and Feudal Reform (Scotland) Act, so ask how a switch would work where you live.

Questions people ask about changing lender

Is switching the same as an ordinary remortgage?

They share the idea of a new loan replacing an old one, but a lifetime mortgage has its own repayment rules and charges. Equity release compared with remortgaging sets out the differences.

How do I find out what leaving my lender would cost?

Start with your offer document. Aviva customers can log in to MyAviva or phone for the figure, and other lenders have their own routes. It changes, as Aviva’s fixed charge includes interest up to the repayment date.

Can I repay part of my plan instead of switching?

The Council’s standards give customers the ability to make repayments without charges, subject to the provider’s lending criteria, and the allowance is set by each lender. Our early repayment guide compares them.

Does a replacement lifetime mortgage need fresh legal advice?

A replacement is a new plan, so independent legal advice applies in the same way as for a first one. You can choose your own solicitor or ask your adviser for names.

How is switching different from just moving my plan to a new home?

Moving home keeps your lender. Council standards give customers the opportunity to move to a suitable alternative property and transfer their lifetime mortgage, subject to the lender’s lending criteria at the time. Switching means a new lender and a new plan instead; see moving house with equity release.

Getting your own figures checked

What leaving would cost, set against what a new plan would save, is the sum to have worked out, and the enquiry form here brings a qualified adviser to your phone for free. If you would like to compare who can help, finding an equity release adviser explains what to look for.