Equity release calculator
See how much you can unlock with our equity release calculator
Use our equity release calculator and find out how much you could get, how much it’ll cost, and how often you’ll be able to cash in based on your individual circumstances.
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
Equity release means retaining the ownership of your home while also unlocking the equity tied into your home. The ‘catch’ with equity release plans is that you repay the capital you released plus the interest accrued when you pass on or move into permanent care.
Learn More: What Are the Pros & Cons?
No, it’s not a bad idea. In fact, it can be one of the smartest financial decisions you’ll ever make for yourself. It allows you to unlock the value of your home, and get this; you only have to repay the equity plus interest accrued when you pass on or move into residential care.
So, if you’re looking to go on that much-needed holiday or work on some home improvement projects, choosing an equity release plan is your smartest option.
Learn More: When is Equity Release a Good Idea
Learn More: What are the Pitfalls of Equity Release?
The lifetime mortgage plan’s interest is set to a fixed rate of compound interest. It means that the interest rate is computed on the total amount, as well as the interest added. It’s often calculated daily, but added to the loan on a monthly or yearly basis.
Learn More: What are the Costs?
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 is a lifetime mortgage UK
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, however, initially take only what you need. It’s vital to remember that there will be consequences to drawing more than you need. It’s also unwise to withdraw equity exclusively for investment purposes.
If you need money in regular, ongoing installments, there are schemes that allow you to withdraw money in set installments, rather than all at once.
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. If not, you can always consider alternative equity release plans.
Learn More: Common Questions About Equity Release
It will all depend on your needs. There are two ways to release the cash tied up in your property without having to relocate.
There is the lifetime mortgage plan where 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 schemes, be sure to check out ‘Types of Equity Release.’
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