Equity release
Free Daily Mail guide to equity release & later-life lending
In the final three months of 2020, equity release customers released £104,501 on average from their homes as tax-free cash, according to the Equity Release Council. This would be more than enough to renovate a three bed house, buy four medium sized new cars, help three first time buyers onto the property ladder or purchase 8,708 tins of paint! With equity release, the money is yours to spend on almost anything you wish once any existing mortgage has been repaid. Despite current government restrictions, the equity release process can still go ahead as normal. With the average case taking between six to eight weeks to complete, you could be planning your home renovation sooner than you think. To get a better idea of what’s on offer and whether equity release could be right for you, read our top equity release facts.
Release up to 55 per cent of your property’s value
If you’re a homeowner aged 55 and over you could release from £10,000 up to 55 per cent of your property’s value, depending on the age of the youngest homeowner and value of your property.
Current low interest rates
The Equity Release Council reported that there has been a 14 per cent growth in the number of loans agreed over the past three years, with half of all products now offering rates under 4 per cent, giving homeowners a wide product range and current low interest rates.
Drawdown options let you take regular income
The most popular type of equity release is called a lifetime mortgage, where you usually have the option to take the money all at once or to take it on a drawdown basis as and when you need it. This means interest only accrues on the money you withdraw.
Ring-fence your inheritance
While it’s true that equity release can eat in to an inheritance, you can also ring-fence a portion of the equity in your property so that it’s protected. This is known as an ‘inheritance protection guarantee’. A specialist equity release broker, such as Age Partnership, will tell you everything you need to know about the effect on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected now or in the future.
No negative equity guarantee
Most equity release plans now carry a ‘no negative equity’ guarantee. This means that when your property is sold and fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more. With most equity release plans there are no monthly repayments, the interest rolls up and compounds until the property is sold. Any money released, plus accrued interest, is repaid upon death or moving into longterm care. Mail Finance can provide you with a free, noobligation quotation to discuss the different options available to you. Equity release may involve a home reversion or lifetime mortgage, which is secured against your property. To understand the features and risks, ask for personalised illustration. Only if you choose to proceed and your case completes would a typical fee of £1,795 be payable.