There are many different equity release plans that help you tap into your property wealth without having to move. But which one is right for you?
Lifetime mortgages are the most popular type of equity release. They offer much more flexibility in the way you can access your money and have a range of different features to meet different needs and priorities.
Lifetime mortgage facts:
Available to homeowners aged 55 and over with a property worth at least £70,000.
Typically there are no monthly repayments to make as the loan plus roll up interest is repaid when the plan comes to an end.
All of the plans we recommend meet the Equity Release Council standards meaning you get the no negative equity guarantee and will never owe more than your home is worth.
Interest rates are low at present and with a lifetime mortgage you can access these low rates fixed for life.
Lifetime mortgage plans and features:
Lump sum and drawdown plans
If you’re looking for a one-off amount of money, a lump sum lifetime mortgage could be the right option. The interest rates on these mortgages are fixed for life.
If you wish to have some money now and access more at a later date, a drawdown plan may be more suitable for you. With this sort of plan, you can take out an initial lump sum and then have access to further funds in the future should you need it.
With a drawdown plan, interest gets charged on the amount of money withdrawn and therefore can be more cost effective for you over the long term. Interest rates on any future cash withdrawals are set at the time the drawdown is taken.
Enhanced lifetime mortgages
Some health conditions and/or lifestyle choices could mean you might be eligible for an enhanced lifetime mortgage. If you are, you could release a larger sum from your property.
An enhanced lifetime mortgage might be right for you if you or your partner have high blood pressure, diabetes, are taking regular medication, you are overweight or a smoker. If you are interested in finding out whether you could be eligible for an enhanced plan, speak to one of our expert equity release advisers who will discuss your circumstances and find the right plan for you.
If leaving an inheritance to your loved ones is something you’d like to do, some plans will allow you to ring-fence a percentage of the future value of your home for your beneficiaries (subject to criteria). No matter what happens to house values, your beneficiaries will receive that percentage in the future.
Although you can move your equity release plan to another property, it must fit the lender’s criteria. The benefit of having downsizing protection means if you want to move to a home that isn’t suitable to the lender, you can repay the amount you owe in full, our expert adviser will explain this feature in more depth to you.
Partial capital repayments
If you can and wish to make repayments on your lifetime mortgage plan, you have this option with some plans.
With this feature, you can make voluntary ad hoc repayments up to 12% of the amount you initially borrowed each year to reduce the size of your loan from which the interest is calculated, without incurring early repayment charges.
Fixed early repayment charges
Lifetime Mortgage plans are a long term commitment and not designed to be repaid early. However, you can choose a plan with fixed early repayment charges, if your long term plans do suddenly change you’ll always know how much you’ll be charged should you choose to pay off the loan early.
At Mortgage Advice Bureau Later Life, we’re confident that we’ll be able to find a plan that meets your needs and works for you.
We’ve carefully selected a group of leading providers to offer a range of products to meet your needs. All the plans we recommend come with competitive rates, high loan amounts and flexible features.
Your adviser will work with you to understand what’s most important to you and make a recommendation on that basis. Your adviser will also tell you if equity release isn't the correct option for you.
And once you decide to proceed with the plan recommend to you, we’ll support you the rest of the way.
Ready to find a plan?
Our specialist equity release advisers are here to help you decide if equity release could improve your retirement ﬁnances.
Are you eligible?
Use our free equity release calculator to find out if you’re eligible and see how much you could release.
A lifetime mortgage is the most popular form of equity release and is a loan secured against your property.
With a lifetime mortgage there are typically no monthly repayments to make as the loan, plus roll up interest, is repaid when the plan comes to an end. Usually, that’s when you, or the last remaining applicant, either passes away or moves into long-term residential care.
With a lifetime mortgage you’ll still retain full ownership of your home.
You should always think carefully before securing a loan against your home.
Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits.
Unless you decide to go ahead, our service is completely free of charge as our usual advice fee of 1.5% of the amount released would only be payable on completion of a plan, subject to a minimum advice fee of £695.