The newer type of Equity Release, called a Lifetime Mortgage, is becoming an increasingly popular way of releasing tax-free cash to enjoy a better retirement. If you’re 55 or over and have money tied up in the value of your home, you could release up to 60% of it with a Lifetime Mortgage. You’ll still own your home and you can live in it forever without going into negative equity. You don’t have to worry about monthly repayments as the interest can roll up into the loan, which will only be paid back once you die or move into permanent care and your house is sold, or you can choose to pay off the interest as you go to preserve your remaining equity.
This trusted, regulated and flexible product, allows you to access your hard-earned equity to spend on the things you love. In this guide, we’ll explain the most common reasons people take out a Lifetime Mortgage so you can understand how this type of Equity Release could improve your retirement.
Improve Your Home & Garden With a Lifetime Mortgage
A big part of retirement for many people is being able to live in a home they’re proud of and have the space to entertain friends and family. Whether it’s a modern extension, new kitchen, landscaped garden or spacious summer house – building your dream home could make to fund a big project or draw down cash for smaller projects as and when you need it to gradually your life a lot more enjoyable. With a Lifetime Mortgage, you can release a tax-free lump sum improve your home.
64% of customers use Equity Release for home and garden improvements.
Pay off Your Mortgage & Debts With a Lifetime Mortgage
Your retirement income is likely going to be lower than during your working years, so it’s important you’re able to spend as much of it as possible on the things you love. Worrying about monthly mortgage or debt repayments can be stressful and restricting for many retirees. With a Lifetime Mortgage, you can release a lump sum of tax-free cash to pay off your mortgage and debts. You can then choose to let the interest roll up into the loan, which will only be paid back once you die or move into permanent care – meaning you’ll no longer have any monthly repayments eating into your retirement income.
53% of customers use Equity Release to pay off their mortgage and other debts in retirement.
Travel the World or Buy a Holiday Home With a Lifetime Mortgage
Your retirement is the perfect time to travel the world, seek new experiences, or just relax in the Mediterranean sunshine! Commitments of youth, such as children and work, are usually winding down, but one restriction that still remains for many is a lack of disposable income. With a Lifetime Mortgage, you can create a drawdown facility where you can withdraw tax-free cash whenever you want to set off on your next adventure. Or you could even release a lump sum to buy your dream holiday home!
32% of customers use Equity Release for holidays and travel in retirement.
Gift Money to Your Family and Friends With a Lifetime Mortgage
Being able to help loved ones financially can be extremely rewarding. The advantage of giving some inheritance with a ‘warm hand’ is that you get to watch your family and friends benefitting from the money. With a Lifetime Mortgage, you can release tax-free cash, either as a lump sum or in smaller instalments, to help loved ones to get on the property ladder, pay for a wedding, fund further education, or save for their future.
22% of customers use Equity Release to gift money to friends and family.
Supplement Your Retirement Income With a Lifetime Mortgage
If your retirement income isn’t enough to fund your desired lifestyle whilst still covering bills and living expenses, a Drawdown Lifetime Mortgage could be your answer. With this type of Lifetime Mortgage, you can create a special cash reserve and withdraw tax-free cash as and when you need it to supplement your retirement income. These products are quickly becoming the most popular type of Equity Release, helping people to live out their golden years with financial freedom.
The Bottom Line
Equity Release as a Lifetime Mortgage can be used in many ways so you can enjoy retirement to the full. You may have noticed that the percentages in this guide add up to more than 100%, and that’s because you don’t have to use all the cash for just one thing, for example, you may want to release a lump sum at the beginning to pay off your remaining mortgage and then draw down the rest as an when you need it to fund holidays, make home improvements, or supplement your retirement income.
At Michael Usher Equity Release we’ve been helping our local community with trusted Equity Release advice for 30 years. You probably have lots of questions, and we’re here to help you understand how these products work and whether they are the right choice for your situation. We never push you, the decision is always yours to make, and we welcome your friends and family to join in the discussion. Book your FREE no-obligation consultation with one of our friendly advisors to learn more – this can be carried out remotely via phone or video call if you’d prefer. We look forward to helping you!
Source: www.keyadvice.co.uk/about/equity-release-statistics/reasons-for-releasing-equity
