Equity Release

Types of Equity Release Schemes

Lifetime Mortgage

You take out a mortgage secured on your property provided it is your main residence, while retaining 100% ownership. This will allow you to keep some of the value in your property for inheritance purposes for your family. You can either roll the interest up or make monthly repayments. Ultimately the loan and any accrued interest will be repaid when you die or if you move into long term care.

Home Reversion

This is where a Home Reversion provider will purchase part or all of your home off you at below market value in return for a lump sum or regular payments. You have a right to continue living there until the day you die rent free as long as you agree to maintain and insure the property. You can also keep a percentage of the property for future use such as an Inheritance for your family. Your percentage will always remain the same despite the value of your property at all times unless you decide to release further equity at a later date. Once the plan finishes the property will be sold and the sale proceeds will be shared according to who owns what percentage of ownership.

Interest-Only Lifetime Mortgage

If you’re over the age of 55 an interest only lifetime mortgage could allow you to release a cash lump sum via a mortgage secured on your home. You also retain full ownership of your property.

This is the most cost-effective method of equity release as it allows you to manage the associated interest charges by making monthly repayments. As long as you keep up with the interest payments the amount you owe never increases. This avoids the compounding of interest associated with lifetime mortgages, where interest is charged on the interest already added to the mortgage.

To qualify, you must meet the provider’s affordability criteria. If you can’t afford or choose not to make full repayments you can elect to make partial payments, to help reduce the long-term cost.

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