Registered office: Enterprise House, Bancroft Road, Reigate, Surrey RH2 7RP. The Equity Release Service is provided by HUB Financial Solutions Limited. Different advisers may have different providers that they work with. Some financial advisers will use a panel of equity release providers from which they will select the most relevant provider for you and your circumstances. Find the best interest rate for your circumstances and credit history.Help your family to understand how equity release works and any impacts it may have on their inheritance.
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Consider if equity release is right for you and suggest alternatives if not.Receiving advice is a mandatory part of the process but a good adviser will also talk to you about what you are wanting to achieve with the money, the potential alternatives, such as downsizing and any risks and upsides of the alternative products available.
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Professional financial and legal advice is essential when considering equity release. And, the no negative equity guarantee available on lifetime mortgages from lenders that are members of the Equity Release Council, means that once you go into long term care or after you have passed away, neither you or your beneficiaries will have to make up any shortfall should your property be worth less than your total debt. There is good news though, you can cut the costs of equity release by choosing a product that allows you to pay back some or all of your interest. After seven years you would accrue £25,274 in interest and owe £105,274. At the end of year two you would have an additional £3,328 in interest to add to your loan. At the end of year one this interest is added to your loan, now totalling £83,200 and you would accrue interest on this amount. While this is higher than a conventional mortgage it is the effect of compound interest over many years that really increases the cost of equity release.įor example, if you borrowed £80,000 at 4% you would accrue £3,200 in interest in year one. Making monthly repayments will reduce the interest costs incurred on your lifetime mortgage.Ī lifetime mortgage equity release product charges interest at rates around 4% up to 7%. If you want the option to make monthly repayments to your lifetime mortgage your lender will need to check these are affordable for you. The rate must be fixed or if it is a variable rate there must be a cap or upper limit for the life of the loan. Interest rates on lifetime mortgages are usually higher than a standard mortgage, often ranging from around 4% up to 7%. In addition, the amount available will also depend on the age of the borrower with the highest LTVs available to older borrowers. The maximum amount they can lend to you is dependent on the plan you choose. Some lenders can even take into account your medical history and may be able to lend you higher amounts than are available through standard lifetime mortgages. Your equity release or lifetime mortgage lender will decide how much you can borrow depending on your age and the property’s value. This can usually be accessed from age 55 onwards and can be a way of supplementing your retirement income using the value tied up in your home. The most common form of equity release is a lifetime mortgage.
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