Home reversion vs lifetime mortgage: one is a loan secured on your home, the other a sale of all or part of it. Here is how they differ.
Both are kinds of equity release, and both let you go on living at home, which is why they get mixed up. MoneyHelper, the free government-backed guidance service, explains each one; for a view on your own home and plans, a qualified equity release adviser is available to compare both with you: request a call through the form on this page. Below, the two sit side by side and neither is recommended; how equity release works in the UK gives the background.
The short version
The Equity Release Council, the industry's trade body, names these as the two types of equity release, both regulated by the Financial Conduct Authority. Under MCOB 3A.2.6R in the FCA Handbook, any communication must describe them as a "lifetime mortgage" and a "home reversion plan", with no other expression for either.
| Lifetime mortgage | Home reversion plan | |
|---|---|---|
| What it is | A loan secured on your home | A sale of all or part of your home to a provider |
| Who owns the home | You keep ownership | You no longer own the part you sold |
| What you receive | A lump sum; on roll-up plans, drawdown payments or both | A cash sum or regular payments for the share sold, usually below its market value |
| Interest | Charged on the loan; if not paid, it rolls up into the debt | No loan to charge it on; the cost is the below-market price |
| Right to stay | Home for life under Council standards, on the plan's terms | A lifetime lease or tenancy, on the plan's terms |
| At the end | The home is sold and the loan repaid; the rest goes to your estate | The home is sold and the proceeds shared in proportion to ownership |
Ownership, price and interest
With a lifetime mortgage you borrow. MoneyHelper calls it "a mortgage loan secured on your property" and adds: "You continue to own and live in your home." On a plan with no monthly payments, the Council says "interest on the loan is rolled up (compounded)", so the debt grows (how equity release interest works; interest-only lifetime mortgages for paying it as you go). Any rise in the home's value stays with you.
With a home reversion plan you sell: MoneyHelper says you "sell all or part of your property to a provider, usually below market value", and the Council says the price takes "into account your age and your health". MoneyHelper's home reversion guide (archived 6 December 2025) puts the amount offered at "usually only between 20% and 60%" of market value, because the provider cannot sell until the home is empty and you go on living there. That is a typical range, not a figure for any plan (see how much a home reversion plan pays).
No loan means nothing grows against you; the Council says the percentage you retain "will always remain the same regardless of the change in property values, unless you decide to take further cash releases". The flip side, MoneyHelper warns, is that "you miss out financially if your home increases in value as you’ve sold part, or all, of your property."
Living in the home, and what your estate receives
For a reversion the Council describes "a lifetime lease", rent-free for life, while MoneyHelper says the provider lets you stay "either rent free, or on a fixed rent or with an agreed annual increase", so any rent is a term of the individual plan; your own solicitor, not the provider's, checks the lease. For a lifetime mortgage, Council standards give members' customers a lifelong right to remain, ending only on a permanent move into care, while the property stays their main home and the terms are kept.
On a lifetime mortgage, MoneyHelper says "Any money left after paying the loan goes to your beneficiaries (friends and family)", unless it is needed for long-term care. On a reversion the sale proceeds "are shared according to the remaining proportions of ownership". The Council's solicitor's certificate flags a reversion risk: someone who dies early "may have received little benefit during their lifetime" while their estate is "considerably depleted". How equity release affects inheritance goes further.
Moving home or ending the plan early
Council members' lifetime mortgages must let a customer move to a suitable property and transfer the loan, "subject to lending criteria at the time of move". For reversions, customers must be offered a new plan on a suitable property on terms no less favourable than those for new customers, and the provider "may charge a customer reasonable costs and expenses". See moving house with equity release.
Repaying early is mainly a lifetime mortgage question. MoneyHelper says there "might also be ‘early repayment charges’ for paying off your loan early". Separately, Council standards give members' customers the ability to make repayments without charges, "subject to lending criteria of the provider"; repaying equity release early goes further. How a reversion can end before death or care depends on its lease and terms, a question for the adviser.
If a move or early repayment is a real prospect for you, how each plan would treat it is worth checking with a qualified equity release adviser, whom the form on this page can put you in touch with.
What both share
The usual trade-offs, set out once in the equity release guide, apply in different forms: interest rolling up on a lifetime mortgage, less left in the estate, a possible effect on means-tested benefits (equity release and benefits) and early repayment charges. Of the Council's standards for members' products, only two apply to home reversion plans: home for life and the option to move.
MoneyHelper says reversion eligibility "varies between providers", with some plans requiring applicants to be "over 60 (or 65)" and mortgage-free; for a lifetime mortgage the minimum age is set by the provider, "typically 50 to 55". See who offers home reversion plans and whether they are regulated.
Advice is part of either route: the Council tells people to "get qualified advice", and under its standards every customer taking out equity release has independent legal advice, a rule its members keep rather than a law. See finding an adviser, the solicitor's role and fees. Approached out of the blue? The FCA's scams guidance urges caution with any call, email or text you did not expect.
Scotland. North of the border, section 9 of the 1970 Scottish conveyancing Act means a lifetime mortgage loan there needs a standard security in place of a mortgage charge.
Questions people ask about the two
Which is better, a home reversion plan or a lifetime mortgage?
Neither in general. MoneyHelper says a reversion could be a possibility "if you don’t want to move, and the full value of your home isn’t needed for inheritance"; whether equity release is a good idea weighs the wider pros and cons.
Do you pay interest on a home reversion plan?
A reversion is a sale, not a lifetime mortgage loan that gathers interest. Costs after the sale, on MoneyHelper's list, include buildings insurance, repairs and maintenance, ground rent or chief rent, and a monthly rental fee if the lease sets one.
Is home reversion the same as equity release?
Home reversion is a type of equity release rather than an alternative to it: MoneyHelper lists "two equity release options", a lifetime mortgage and a home reversion plan. Equity release types covers the wider range of plans.
Next step
Which type, if either, fits turns on your age, health, what you hope to leave and whether you may move. To talk those points through as a whole with a qualified equity release adviser, send a short request through the form on this page; independent legal advice from your own solicitor comes before anything completes.
Sources: MoneyHelper, What is equity release?, Home reversion and Lifetime mortgage; Equity Release Council, What is equity release?, Home Reversion, Standards and The Standards (PDF); FCA Handbook, MCOB 3A.2; legislation.gov.uk, 1970 Act, section 9; FCA, Protect yourself from scams. Accessed 18 October 2026.