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Use the FREE Equity Remaining Calculator
See how much cash you can get from your home.
Did You Know? Every 12 minutes a homeowner over 55 in the UK unlocks £91,667 tax-free cash.
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You’ve been feeling ill lately, and according to your doctors, you have a few months left. Since you took out an equity release policy five years ago, you’re wondering how much your children will get from the inheritance. You weren’t worried about that a few months ago, but with the current financial recession and with grandkids on the way, you’re anxious about how much money they’ll get.
One year ago, you decided to make some early repayment charges and are wondering if that’s going to help in increasing the equity1 remaining for your beneficiaries. Well, to see how much you can get, it’d be best if you try the equity remaining calculator and figure out the estimated amount your heirs will receive.
When you take out the equity release2 mortgage, especially when you have a child, it’s vital to understand the amount of capital you’ll leave for your family, once you repay your lifetime mortgage plan.
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You can do so by following these steps:
- First, check out your estate’s current market value. The price you paid for your estate isn’t the present value of your property
- Subtract your estate mortgage balance. When you have the current market value of your house, then you subtract the amount you still owe on your estate mortgage and associated loans from the estimate. It’ll indicate your pre-existing home equity
- When you’ve done everything, then you can find out how much you can earn
Well, this is basically the amount of cash that’ll remain when your plan provider puts up your home for sale, takes his/her share of the mortgage plus interests accrued, and then the remaining balance – the equity remaining- goes to your family/beneficiaries.
Equity release is a mortgage plan that allows homeowners to unlock the capital tied up in their homes by turning it into a cash lump sum or monthly income. You pay the loan when you die or move into permanent care.
Your plan provider will put up your house for sale, take their share, and the equity remaining will go to your beneficiaries.
There are several ways of ensuring that you can leave your family something after you’re gone, especially when you have the equity release plan. You can ring-fence some part of your estate when you have the home reversion plan.
You also leave some cash by taking the voluntary repayment scheme or interest-only lifetime mortgage since these plans allow you to pay up your interest, thus ensuring you only pay the loan amount when you pass on. However, to figure out how much you can leave, you should try using the remaining equity calculator.
While the equity loan mortgage will undoubtedly have a significant impact on your inheritance and the value of your property, there are you can implement to help you lower the effect when you’ve taken these forms of plans.
It’d be best if you also consider the impact of the estate prices, since the more significant the value of your estate when your equity release scheme is repaid, the more substantial your inheritance will be.
While the estate prices might go up and down, recent statistics show that they’ve only gone up over the extended term. As per the Nationwide House Price Index, the standard property price has increased by 345% over the last 30 years.
So, how much could you leave your family?
Well, to determine the amount of inheritance you’ll leave your family when you repay your equity release plan, you can use the equity remaining calculator. The equity calculator is based on a roll-up lifetime mortgage where no repayments are made, so the interest compounds yearly.
It’s straightforward to use. You can also change the results based on what you think might happen in the future like the amount you wish to borrow, the interest rate on your equity release policy and how much you think your estate will go up in value, every year, as a percentage. It’s also referred to as the House Price Index or HPI. After you’ve computed what you need, then the results will show up instantly.
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