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Equity Release

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Equity Release

Equity release is a type of mortgage where homeowners aged 55 and over can access the equity within the value of their home. The value of your home, after deducting any outstanding mortgage is the equity that you have in your home. 

This equity is often passed down to homeowners beneficiaries as inheritance, however, thanks to the positive changes to equity release many homeowners are now accessing this wealth to boost their retirement income. The most common type of equity release plan is a Lifetime Mortgage. With a lifetime mortgage the money you release from your property is completely tax-free and is fixed at a reserved interest rate for your lifetime. You will continue to own your own home.

The introduction of the Equity Release Council’s regulations now means that there is a no-negative-equity guarantee, meaning you’ll never owe more than your home’s worth. The key feature of a lifetime mortgage is that typically you don’t have to make any monthly repayments at all as the balance of the loan plus roll up interest is repaid when the plan comes to an end. 

However, these plans do now come with the option to make overpayments should you wish to.  For homeowners who do wish to make payments to slow or stop the effect of the roll up interest and ensure more equity is left for their loved ones, there are plans where some or all the interest can be paid each month. Overpayments to start to reduce the capital balance are also an option (usually 10% of the original loan amount per year is permitted). Equity Release will reduce the value of your estate and may affect your entitlement to means tested benefits.

How Is A Lifetime Mortgage Calculated?

The amount you can raise is dependent on your age (or the age of the youngest borrower) and the property value. There are no affordability assessments to determine how much you can borrow, if you are over the age of 55 and your property meets the lenders criteria you are eligible for a lifetime mortgage. How much you can release depends on your age and the property value.
The older you are, usually the more you can release. The maximum loan to value with most lifetime mortgage providers is around 55%.

Like a standard mortgage lender, each lifetime mortgage lender has their own criteria.
There are lots of different features to the lifetime Mortgage deals available from the whole of the market and is important to have an advisor who you trust review each feature with you to find out which is most important and suitable for your circumstances.

Which One Is Right For Me?

Our advisers at Mortgages with Clarity offer specialist lifetime mortgage advice which has been carefully considered about all mortgage options available to you.

A full fact find assessment of your current situation and future plans will take place to ensure the recommendation is the best option for you and also for your family.

If you would like too, we would love to have your family involved in our calls and conversations. We find your loved ones often ask the best questions to ensure they understand exactly the type of plan you are taking out, what this means for you, and also what this means for their future inheritance.

Enhanced Lifetime Mortgages

An enhanced Lifetime Mortgage is another positive flexible feature from modern lifetime mortgage lenders.

If the youngest applicant has certain medical conditions such as diabetes, high blood pressure or heart problems (other medical conditions apply) this means you may be eligible for a medically enhanced lifetime mortgage deal,

A typical enhancement means you may be able to release more money from your property compared to a standard lifetime mortgage plan, or potentially benefit from an enhanced interest rate deal.

How Do I Learn More?

The key to lifetime mortgages is education. We feel the best way for you to fully understand equity release is to gather as much knowledge as possible from the comfort of your own home. That way by the time you reach out to an advisor to put your plans into place you have a good understanding of what a lifetime mortgage entails.

Hopefully you will find all the information to complete your own research into this potential option on this website with our range of tools and guides, that you can find within our education hub.

If you are at the stage where you would like to find out more about the lifetime mortgage deals available to you, then we would be happy to help.

Your best interests at the heart of our advice. Get A Consultation

If you are at the stage where you would like to find out more about the lifetime mortgage deals available to you, then we would be happy to help.

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OTHER OPTIONS

Later Life Lending

Later life lending is a  product aimed at homeowners over the age of 55. This product allows individuals to borrow money based on the value of their property, whilst still having the ability to live in the property.

A retirement interest only mortgage (RIO) is a mortgage for those age 55 and over who still wish to make monthly interest payments on the amount borrowed. 

It is basically an interest only mortgage with no end date. The loan is repaid when the plan comes to an end when you, or if a joint application, the second borrower either pass away or move into long term residential care.

Mortgages with Clarity is a trading style of Clarity Wealth Management LLP.

Clarity Wealth Management LLP is regulated by the Financial Conduct Authority. No: 575252.

Registered in England and Wales as a limited liability partnership. No: 0C371189.

Registered address: Waterside House, The Plains, Totnes, TQ9 5WD.

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Offices

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Email

mortgages@claritywm.co.uk

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Sutton Harbour, Plymouth, PL4 0RA

08002335599

Monday-Friday: 8:30am- 4:30pm

Disclaimer: Your home may be repossessed if you do not keep up repayments on your mortgage! Please also note that not all BTL mortgages are regulated by the FCA.

Complaints : If you need to register a complaint, please write to Simon Owen, Head of Compliance, Clarity Wealth Management LLP, Waterside House, The Plains, Totnes, TQ9 5DW.

Email SimonOwen@ClarityWM.co.uk or call the number shown on our contact page.

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