Equity Release FAQS
How much can I release?
This depends on the value of your house, your age and state of health. In broad terms, the older you are the more you can borrow, with the minimum age being 55.
Could I lose my home?
You will always be the owner of your property and you and your partner will be able to live there until you the second of you dies or goes into care. We only use lenders who guarantee that you cannot lose your home as long as you respect the terms of the contract.
What will the interest rate be?
This depends on the value of your house, your age and state of health. Most interest rates are fixed for the lifetime of the loan and are therefore higher than for a standard mortgage. Some lenders offer a variable rate and your adviser will discuss the right option for you.
Do I have to pay back interest?
Not necessarily. You can choose not to pay interest in which case it is added to the loan on a compound basis. The most flexible contracts allow you to make repayments, vary the amounts you pay or to stop and re-start payments.
Can I move house?
Yes, as long as your new house fits the lender’s criteria. No matter how attached you are to your home, if your circumstances change, it is reassuring to know that you can move and, if appropriate, transfer your loan to the new property.
How are State Benefits affected?
The money you receive is tax-free but your adviser will always discuss any effect on State Benefits
Can I leave an inheritance?
Although the amount of money you leave will be reduced, some schemes allow you to leave a guaranteed percentage of the value of your home to your family. This means that whatever happens your heirs will inherit a proportion of the value of your property on your death.
Can I borrow more money the future?
Yes, depending on market conditions at the time. If your property increases in value you can borrow more money and also if you are older. You might be surprised at the amount you can release.
How does the loan get repaid?
Usually by selling the property on your death or going into care. In either circumstance, your heirs will have 12 months in which to sell the property.
Getting More Information
For more information, please speak to your adviser at the Mortgage Centres