How does equity release work?

Your Equity Release deal can be tailored to suit your needs.

How does Equity Release work?

If you’re over 55 and you own your home, it’s likely you’ll be eligible to release equity as tax-free cash using a popular, fair, and flexible type of Equity Release called a ‘Lifetime Mortgage’. You can receive up to 60% of the equity in your home, depending on your age, the value of your property, and the area you live in. The equity is released as a loan secured against your property so you still retain full ownership of your home, and you can live there forever or move the deal to a new property. You don’t have to pay any monthly repayments as you can choose for the interest to ‘roll-up’ into the loan, which will then be paid back to your lender when you die (or move into permanent care) and your house is sold. You’ll never be in negative equity, you can access the cash as a lump sum or in instalments, and you can spend the money however you wish.

There are plenty of waysto tailor your deal to suit your needs. We understand it’s a big decision to make, but we’re confident that once you understand how a Lifetime Mortgage works, you’ll be excited by the possibilities. Scroll down to learn more about the different plans available or book a FREE consultation where our friendly advisors will explain everything to you. We never try to pressurise you, the choice is entirely yours, and we welcome family and friends to join in the discussion.

EQUITY RELEASE CALCULATOR

Find out how much cash you could release

It takes less than 60 seconds…

Which type of Lifetime Mortgage is right for you?

Lifetime Mortgages have become increasingly flexible in recent years.The main options are outlined below, but you may be able to tailor your plan further to suit your situation and maximize the benefits.

Lifetime Mortgage

With a typical Lifetime Mortgage, you’ll receive up to 60% of your equity as a lump sum of cash. How much you’ll be able to access depends on your age, the value of your home, and where you live. You won’t have to pay any monthly repayments, because the interest will roll-up into your loan, but this does mean that the balance you owe will compound (grow) over time. If your property increases in value this can offset or slow the growth of the balance. The good news is, no matter how long you live you’ll never be in negative equity, this is guaranteed.

Interest-only Lifetime Mortgage

Interest-only Lifetime Mortgages have been a game-changer for retired people who aren’t typically eligible for a regular interest-free mortgage because, in essence, they offer the same outcome. They are also a popular choice for those who wish to protect their remaining equity to pass on as inheritance when they die. With an Interest-only Lifetime Mortgage, you pay the interest in monthly instalments to prevent it from rolling up into the loan and compounding over time. This means that only the original loan balance is payable when you die, leaving the rest of your equity intact to pass on to your loved ones.

Voluntary Repayment Lifetime Mortgage

Voluntary Repayment Lifetime Mortgages are even more enticing for those who wish to pass on inheritance to loved ones, because not only can you protect the remaining equity but you can also increase it. These products allow you to pay ad hoc repayments of interest as well as capital, therefore reducing the balance owed to your lender and the total amount of interest paid. Depending on the lender, you’ll be able to repay up to 40% of the loan value each year without any fees or penalties.

Draw-down Lifetime Mortgage

Drawdown Lifetime Mortgages were developed for people who want to access their equity gradually over a long period of timewhilst minimising interest liabilities. With these products, you can receive a smaller initial lump sum and then make further withdrawals as and when you need to. You’ll only pay interest on the amount you have withdrawn, not on the total amount available to you. These plans offer the greatest amount of flexibility and are becoming an increasingly popular way to provide an ongoing cash reserve facility throughout retirement.

Enhanced Lifetime Mortgage

Enhanced Lifetime Mortgages can be used to release more equity from your property than a regular Lifetime Mortgage, or reduce your interest rate. However, you’ll only be eligible for these plans if you are in poor health, and you’ll need to prove it using your personal health records. In general, the poorer your health the more you’ll be able to borrow or the lower your interest rate will be.

EQUITY RELEASE CALCULATOR

Find out how much cash you could release

It takes less than 60 seconds…

It’s completely free to chat with us and discuss your situation. We understand that due to coronavirus you may be nervous about meeting us in person, but the good news, is we can now carry out all our services remotely. We’ll explain everything you need to know during your free chat, so call us today or book your free consultation below.