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Equity Release

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Did You Know? Every 12 minutes a homeowner over 55 in the UK unlocks £91,667 tax-free cash.

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John Lawson
John Lawson
Last Updated: 25 Sep 2020
(Rated from 267 reviews)

Retirement ushers in the unknown. If you don’t have reliable investments or a handsome pension fund, then it could be challenging trying to maintain your lifestyle or actualize those lifelong dreams you always thought you’d bring to life when you retire. With the drawdown lifetime mortgage, however, you can unlock the equity tied up in your home and be a step closer to getting to Panama or making those kitchen renovations.

The Drawdown Lifetime Mortgage Calculator Explained

Are you cash strapped? Do you own property within the remits of the UK and a home worth more than €70,000? Are you aged 55 and above? Have you been looking forward to vacationing in the Bahamas or funding your home gentrification projects?

If yes, taking out a drawdown lifetime mortgage1 is your best option. The mortgage scheme is a form of equity release2 plan that allows you to unlock the capital tied up in your home bu turning it into a cash lump sum or drawdowns. Unlike with other traditional mortgages, the scheme enables you to unlock the initial lump sum, and the rest goes into a cash reserve facility.

Initially, depending on your plan provider, you’ll borrow a minimum of £10,000 from your ‘cash reserve’, but then after that, you’ll be free to borrow as much cash as you’d like and as many times as you’d wish to – until your capital reserve is entirely used.

The minimum supplementary borrowing is usually £2,000, meaning you can take smaller amounts for fewer expense items, without you having to take more than required.

There’s no additional charge for making withdrawals, but the interest rate you’re charged will be the one that’s present at the time, which might be different from the interest rate at the time you initially borrowed. Once you’re set up with the plan provider, the cash is placed into your bank account within a few weeks.

As the interest is only charged on how much you borrow (not on capital in your cash reserve), it’ll reduce the ultimate amount of interest to be reimbursed if you borrow in a series of drawdowns over time – instead of one large lump sum.

How Do You Use the Drawdown Mortgage Calculator?

To figure out the amount you can receive with a drawdown lifetime mortgage, you have to use the drawdown calculators.

To use the drawdown lifetime mortgage calculator, you simply have to:

These are the criteria used by plan providers to decide the amount of capital you can borrow.

Our Most Commonly Asked Questions

An drawdown mortgage1  could be a great way to help you live your later life to the full. By borrowing a tax-free lump sum you could be able to fund home improvements, help younger family members get on the property ladder2  , or simply maintain your lifestyle in retirement. How much you can borrow depends on a number of factors, including your age, the type of asset you own, and its value. Use our free drawdown mortgage calculator to find out how much equity you could release. Discover what is an equity release?

When comparing the drawdown mortgage market, a specialist adviser will explain:

  • You have to get advice before unleashing equity.
  • Check for plans that have a no negative equity guarantee, so you’ll never owe more than your home’s value.
  • It reduces the value of your estate.
  • The initial consultation is free with no strings.
  • The most popular form of equity release is a lifetime mortgage, which is a loan secured against your home. Note that you will still own your home.

If you’re looking for a specific equity release calculator provider have a look at the best equity release companies or meet an adviser in any of these locations.

Drawdown mortgage is a way of unleashing the wealth (cash) tied up in your realty without the need to move. With equity release3  products, if you are over the age of 55, you can either borrow against the value of your home or sell all or part of it for a regular monthly income, a lump sum, or the facility to get at equity as and when you like or a combination of these options. Use our free drawdown mortgage loan calculator to see how much you can release now.
Although there are many different plans available, they can all be split into four categories of equity release schemes.

Lifetime Mortgage Loan

You release a lump sum from the value of your property, by taking out a mortgage secured on your house (provided it is your primary residence) whilst keeping 100% ownership of your home. This amount, plus any interest accrued, (you can choose to make repayments) is repaid from the sale when you pass away or move into long-term care.

Drawdown Lifetime Mortgage

This works similar to Lifetime Mortgage4  but with a regular cash reserve/draw down option allowing you to withdraw amounts at a frequency you choose up to a specified amount of years, or until the cash reserve has been used up.

Interest-Only Lifetime Mortgage

You get a lump sum and pay a monthly interest on the loan, which can be fixed or variable2, rather than allowing the interest to roll up. The amount you originally borrowed is normally repaid when your home is eventually sold.

Home Reversion Plan

Here, you sell some or all of your house to a home reversion provider in exchange for a lump sum of money or routine payments, whilst retaining the right to live in your home, rent free, for as long as you live, but you have to agree to maintain and insure it. At the end of the plan it is sold and the sale proceeds are shared according to the remaining proportions of ownership. Not Looking For Equity Release? Use our free lifetime mortgage calculator to see how much you can release now.

You are free to use the money on almost anything you choose. There are many reasons for unleashing equity from your home and here are just a few of them.

Common Equity Release Uses:

  • To supplement your pension income to cover living expenses
  • To settle a repayment mortgage or clear the balance on an interest-only mortgage
  • To improve your standard of living
  • To see your family enjoy their inheritance while you’re still here
  • To carry out some home renovations
  • To take that holiday of a lifetime
  • To help your children onto the property ladder
  • To pay off other outstanding debt and lower your monthly outgoings.

Use our free drawdown mortgage calculator to see how much you can release now.

Drawdown mortgage plans are not right for everyone and it is important that you fully consider your options and receive independent financial advice before making a decision. It is also important that, if you do decide to use an equity release product, you choose one that meets your needs. Remember that taking a drawdown mortgage plan is generally a long term option. However, there are flexible plans available that may fit your varying needs and some will allow you to repay in the future without any penalties. A financial adviser5  can help you to choose the plan that is right for you. Use our free drawdown mortgage calculator to see how much you can release now.

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SovereignBoss.co.uk is a marketplace connecting people with mortgage firms. Accordingly, SovereignBoss.co.uk does not provide quotes or sell products directly to consumers and is not a licensed agent or broker.

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