Equity Release Calculator
How much can you unlock from your home?
In the UK, a homeowner over 55 unlocks £91,667 tax-free cash every 12 minutes.
Lump-sum lifetime mortgages,2 (the most popular type of equity release plans), offer you access to a portion of the equity that has built up in your home in the form of a lump sum.
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Common Reasons for Releasing Equity
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Some Common Questions
The equity you can release is dependent on:
- age of the youngest borrower,
- current property value,
- whether you have any pre-existing health issues.
You should, initially only take what you need. Remember that there’ll be consequences to drawing more than you need.
If you need money in regular, ongoing installments, some schemes allow you to withdraw money in set installments, rather than all at once.
It depends on your needs. There are two ways to release the cash tied up in your property without having to relocate.
There’s the lifetime mortgage plan. Here you repay the money you release plus interest, when the lender puts your home up for sale. This will only happen when you pass on or go into a long-term care facility. There are also no payment requirements.
The home reversion scheme involves the provider buying a percentage (or all) of your estate (at less than market value) for a tax-free lump sum. You, in turn, get a lifetime tenancy that lets you reside rent-free in your home for life or until you decide to move into residential care.
To learn more about these types of schemes, be sure to check out ‘Types of Equity Release.’
Learn More: Who are the top companies?
Each plan is different. However, you need to be aware that most plans use compound interest, which can escalate.
Learn More: What are the Interest Rates?
The percentage of your property that you can borrow against will depend on your age (the older you are, the more you can borrow).
At 65, for instance, you can usually borrow 25% to 30%. If you’re, however, older, you can borrow as much as 50%.
There are also minimum mortgage amounts – which can range from £15,000 to £50,000.
Learn More: What’s a lifetime mortgage in the UK?
The frequency depends on:
- the existing terms,
- the outstanding balance,
- if the property value has increased.
Lenders will use a combination of you and your partner’s ages, the property valuation, and the loan-to-value tables, to help them determine whether you can release any more funds.
Learn More: Common Questions
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