A family member’s sudden care needs can bring not only emotional strain but urgent financial decisions. Whether you’re exploring how to fund residential care, cover home adaptations, or preserve the family home for future generations, understanding the role of later life lending is critical.
In this article, we explore the lending solutions available, the planning conversations families should be having, and why bespoke advice can make a material difference in both outcomes and peace of mind.
According to recent estimates, the average cost of residential care in the UK can exceed £50,000 per year. For those requiring nursing care, the figure is often higher. While some individuals qualify for means-tested support from the local authority or NHS continuing healthcare, many families find themselves in a funding gap, with assets just above the threshold for support, yet insufficient liquidity to meet ongoing care costs without depleting their wealth or selling property.
This is where mortgage planning in later life becomes highly relevant.
The most significant asset for many individuals in their 50s, 60s, and beyond is their home. As care needs arise, for themselves or a loved one, tapping into this equity can provide a dignified, timely, and tax-efficient way to access funds. However, the route taken matters greatly.
Broadly, later life lending includes three core mortgage solutions:
A lifetime mortgage allows individuals typically over 55 to release a lump sum or drawdown facility from their property, with interest rolled up and repaid from the sale of the home upon death or permanent move into care. There are no mandatory monthly payments, although some newer products offer voluntary interest servicing to manage the long-term cost. This ability to have no payments is well-suited to meeting the cost of care.
RIO mortgages are interest-only mortgages with no fixed term, usually available from the age of 55 or 60. Borrowers make monthly interest payments until they pass away or move into long-term care, at which point the loan is repaid. These products suit clients with stable retirement income who wish to preserve equity by preventing interest roll-up.
Contrary to common belief, it is increasingly possible to access conventional term mortgages, including interest-only or capital repayment, with no maximum age, subject to affordability. Some specialist and private lenders will assess earned income, pension income, or even future downsizing plans as part of a structured borrowing approach.
Each solution carries distinct benefits and considerations. Choosing the right structure depends on the intended use of funds, income profile, estate planning objectives, and the preference for liquidity versus long-term value retention.
There are several other later life mortgage solutions which you can learn more about in our guide for homeowners over 50.
When the conversation turns to funding a parent’s or partner’s care, urgency often dictates action.
Selling the care recipient’s property may not be desirable or feasible, particularly if another family member is still living in the home or if a quick sale would be financially disadvantageous.
In such cases, it is often a younger relative, typically over 50 and property-owning themselves, who steps in to support. We are increasingly advising clients in this cohort who are considering lending on their property to:
Each of these scenarios can be addressed through tailored lending structures. Importantly, most clients are unaware that they may be able to use traditional mortgage solutions, rather than defaulting to equity release. There is no ‘one-size-fits-all’, and the market has evolved substantially in recent years.
Thanks to growing longevity, changing attitudes to retirement, and rising property values, the later life lending market has matured rapidly. A number of building societies, private banks, and specialist lenders now offer products designed specifically for borrowers in later life, often with terms extending well into their 80s and 90s.
Many lenders will now consider:
This flexibility is crucial. It allows homeowners to raise funds when needed, without prematurely compromising future financial plans or incurring unnecessary costs.
For those looking to support relatives while also preserving wealth for children or grandchildren, strategic structuring is essential. Lifetime mortgages, for instance, can reduce the value of the estate over time due to compound interest, but may avoid the immediate sale of a much-loved family home. RIOs or term-based mortgages, by contrast, can offer more control and preserve equity, albeit with monthly commitments that must be met.
Some families opt for joint borrower sole proprietor structures, enabling adult children to support repayments without owning the property. Others explore gifting via equity release for Inheritance Tax planning, although this should always be undertaken with tax advice.
The key is alignment between the financial realities of care, the structure of the family’s assets and income, and the long-term intentions for property and inheritance.
Later life lending is not just a product choice. It is a strategic decision that touches on personal values, financial planning, and family relationships. That is why working with a specialist adviser is so important. At Henry Dannell, we are frequently called upon at moments of transition, when care needs emerge, when family members step in, or when standard lending has proved unviable.
Our approach combines access to the full later life lending market with deep experience in structuring bespoke solutions. We consider every layer, from product suitability and lender appetite to the long-term financial and emotional implications.
Above all, we listen carefully to each family’s unique circumstances. Because in these moments, clarity is not a luxury. It’s essential.
If you or a loved one is facing care-related decisions and would like to explore the lending options available, we invite you to speak with a Henry Dannell adviser. We are here to provide discreet, strategic support, with solutions grounded in understanding, not assumptions.