Is now the time to consider equity release?

Rates lower than 3% – has there ever been a better time to consider equity release?

With equity release rates currently dropping way below 3%, what does this means for you?

In a nutshell the low equity release rates mean that it could cost you less to borrow money. On a rate of 2.79% the equity release loan doubles every 24 years rather than every 10 years as it would on a rate of 7.18%. So, the lower the rate the less interest you pay over the lifetime of the loan. What’s more, equity release plans are becoming more flexible with plans now available that will pay you a monthly income, or you can choose to take the taxfree cash that you release as a lump sum of money. Some equity release brokers, such as Age Partnership, can also provide you with a free quotation with no obligation to proceed. This can enable you to find out if equity release is the right solution for you.

What is equity release?

Equity release allows you to access money from your home whilst still continuing to live in your home and with a lifetime mortgage, the most popular form of equity release, you continue to own 100% of your own home. The money that you release is tax-free and you can choose to access it as a lump sum or as smaller amounts over time – whichever works best for you. This retirement finance solution is only available to homeowners who are aged 55 or over.

The importance of advice

The amount of money that you can release is determined by the age of the youngest homeowner and the value of your home. There is no requirement to make monthly repayments if you don’t wish to, as the money that you release, plus the interest that you accrue, is repaid when you die or move into long term care. The actual rates that you can secure will depend on your individual circumstances Equity release may involve a home reversion plan, or a lifetime mortgage which is secured against your property. As equity release is a specialist financial solution you should seek independent financial advice. An advisor will tell you everything you need to know about equity release including 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. To understand the features and risks, ask for a personalised illustration. Equity release requires paying of any existing mortgage. Age Partnership provide initial advice for free and without obligation. Only if you choose to proceed and your case completes would a typical fee of 1.95% (minimum £1,495) of the amount released be payable.