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Use the FREE Lifetime Mortgage 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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Have You Been Wondering Which Equity Release Plan to Choose? We're Here to Help You Decide. Take a Look At the Lifetime Mortgage Calculator & Find Out If It's the Right Option for You.
The Nitty Gritties of the Lifetime Mortgages Calculator
With the world stumbling into a global economic recession, you could benefit from some extra capital in retirement. Whether that typically means having the holiday of a lifetime, some much-needed home improvements or opening up your restaurant after twenty years slaving for the country’s top chef, having some additional finances in retirement is essential.
One of the most incredible options to help you out, thanks to the Financial Conduct Authority3 (FCA) is the popular lifetime mortgages. The mortgage plan allows homeowners aged over 55 to borrow cash against the value of their estate while still retaining 100% ownership of the house.
If the equity release mortgage4 option is something you might want to consider, then it’s imperative to find out the amount of cash you could get from the mortgage. With that, here’s a comprehensive guide on how to use the lifetime mortgages calculator.
Lifetime Mortgages Explained
As mentioned above, lifetime mortgages are residential loans that are designed for homeowners aged over 55. They allow you to untie the equity tied up in your estate. You don’t repay the loan like other traditional mortgages. With the lifetime mortgages, you repay the mortgage when the last homeowner die or move into a long-term care facility (mostly the retirement homes). When you pass on, the equity release companies put up your house for sale then take up their share of the loan plus interests accrued. The remaining balance then goes to your estate – beneficiaries. It’s crucial to note that most mortgage lenders allow 12 months for the repayment process to be completed.
The lifetime mortgage providers charge you interest on the amount borrowed, and it’s added monthly. The interest you’re charged will compound after that. If you don’t make any payments (like by taking the voluntary repayment plan or interest-only mortgages), your balance will increase for the rest of your lifetime – meaning you’ll have less inheritance to leave for your family.
All lifetime mortgages are governed by the Equity Release Council principles, which include the famous ‘no negative equity guarantee5. The guarantee scheme ensures that you and your heirs won’t pay back more than the initial value of your estate. The protection only kicks in if the debt ever becomes more massive than the property value.
So, if you’re looking to get some supplementary finances to help you fund your grandchild’s college fees, then this is the best option. However, one might ask, how do you figure out the amount you can get from a lifetime mortgage scheme? Well, here’s all the info you need to know about the lifetime mortgage calculator.
How to Use the Lifetime Mortgage Loan Calculator
If you’re looking to find out the amount of cash you’d get from a lifetime mortgage scheme, then you need to use the lifetime mortgage calculator uk. The equity release calculator will require you to input:
These are the criteria that equity release companies use when determining the total amount you can borrow from your lifetime mortgage.
Some lifetime mortgage providers also require you to input your gender and marital status.
It’s important to note that the equity release calculators don’t only show you the amount you can release with a lifetime mortgage. Still, it can also display the amount you can get from an impaired lifetime mortgage (if you have any medical conditions) and an interest-only mortgage (where you make monthly interest repayments).
Therefore, don’t dive into depression, trying to figure out where you’ll get the funds to pay for your mortgage or help your child clear her student debts. With the lifetime mortgage, you can get tax-free to pay for all these expenses and also have some extra to pay for that much-needed vacation.
Our Most Commonly Asked Questions
Is a Lifetime Mortgage Worth it?
An lifetime mortgage 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 improvements to your home, help younger family members get on the property ladder, or simply keep your lifestyle in retirement.
How much you can borrow is based on a number of factors, including your age, the type of property you own, and its value. Insert your information into our lifetime mortgage calculator to find out how much equity you could access. Get equity release advice now & see how the latest plans perform.
How Does a Lifetime Mortgage Work?
When comparing the policy, a specialist adviser will explain:
- You have to get advice before freeing equity.
- Check for plans that have a guarantee so you can’t be liable for more than your house is worth.
- It reduces the value of your estate.
- The initial consultation is free.
- The most known form is a lifetime mortgage, which is a loan secured against your home. Note that you will still own your home.
What's a Lifetime Mortgage?
You are property rich but cash tight. You’ve benefitted over the years from the increasing property prices, but without cash flow, you are severely limited in what you can do.
You’ve got time to do the things you’ve also wanted to do, but you can’t, because all of your money is tied up in your property. Imagine that you could do that renovation, get that perfect car or go on that dream holiday.
There’s a way…and still stay in your property.
It is called equity release, and it’s booming in the UK. You’ve seen it on the TV, heard about it on the radio, and you’re not the only one. Every 12 minutes, someone over 55 in the UK released equity from their property. Let’s take a more in-depth look at what it’s.
It is a financial product that enables homeowners who are 55+ to unlock the value in their home by turning it into a lump sum or regular income.
Unlike traditional mortgages, with equity release programs, you don’t have to make any monthly repayments, and they allow you to continue residing in your residence until you pass away or move into permanent care. Only then is your plans customarily repaid from the sale proceeds of your home.
If you’re over the age of 55 and a homeowner, you’re almost certainly eligible. What you release isn’t taxable, and you have the financial freedom to use it on what you want – meaning you get to tour the world, give an inheritance to your family and enjoy your golden years.
You’ve always waited for the moment to do what you want when you want. Now you can have the funds to do that. Is it safe though?
What are the Benefits of a Lifetime Mortgage?
Equity release is an ideal option for anyone looking to enhance their lifestyle after retirement, and here are some of the ins and outs.
1. It Offers You Financial Freedom
By taking out plans, you can use to spend your money as you want. Whether you need to upgrade that kitchen, make home changes like adding new double glazing, loft & cavity wall insulation, a world tour, or to help your kids buy their first home, it’s all up to you.
What you receive is tax free, and you can opt to take it as either a lump sum, as an income or in several smaller chunks (‘drawdown’ ) – thus giving you more flexibility.
2. It Does Not Require You to Downsize
You do not get to experience the hassle, inconvenience, and expense of moving out of your treasured family home. It provides you the financial freedom you need but also the freedom of choice.
3. It Provides the ‘No Negative Guarantee’
It means that it protects you from having the debt due from being driven up by house price changes. Therefore, your beneficiaries cannot ever incur any debt over & above the market value once the mortgage holders die or placed into permanent care.
What Are the Different Types of Lifetime Mortgage Schemes?
Types of Schemes
Although there are many different plans available, they can all be split into a few core categories that you need to understand.
You release a lump sum from the value of your house, by taking out a mortgage secured on your house (provided it’s your primary residence) whilst retaining 100% ownership of your home. This, plus any interest accrued, (you can select to make repayments) is repaid from the sale of your home.
1. Drawdown Lifetime Mortgage
It provides you with a flexible facility from which you can take withdrawals as and when required. It’s one of the most convenient plans because:
- It allows you to keep funds in a separate account, available for ‘drawdown.’
- The interest will not accrue on the funds in your reserve, till you opt to release it, thus enabling you to minimise the interest your schemes charges you.
- It gives you a safety net of a money you have access to whenever you need it.
It is specific to one’s health and lifestyle issues. If you qualify, having this allows you to borrow more money and at a lower interest. In both cases, your life expectancy is used to calculate the maximum equity you can release, or what your lower interest will be.
3. Interest Only
The preference for monthly repayment upturned the mechanics of traditional schemes. An interest only lifetime mortgage allows you to pay off a certain amount of interest every month, while also allowing you to maintain a good balance.
Through these repayments, you can manage the interest that will need to be paid back when the lender sells your home, making it a very convenient option.
4. Voluntary Repayment Plan
It is the most recent innovation, and allows ad hoc repayments of interest and/or capital to maintain a level balance. It enables you to make payments of up to 15% of the amount borrowed each year (dependent on the plans) with no penalties.
5. Lump Sum
If you are not interested in drawdown plans and are looking to have a one-off release of equity, then this should be your go-to plan. It is, in essence, a core lifetime mortgage with minimal extra features, which on the whole, results in a lower interest.
6. Home Reversion
These shared proprietorship equity release schemes allow you to sell a portion of or your entire home to a plan provider, and in return, the home reversion companies offers you regular monthly payments, lump sum or a combination of both.
What Can a Lifetime Mortgage be Used For?
You are free to use the money on almost anything you want. There are many reasons for having equity released from your home and here are a few of them.
- 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 lifestyle
- To see your family delight their inheritance while you are still here
- Top up your income in retirement
- To take that holiday of a lifetime
- To help your children onto the property ladder
- To pay off other outstanding balance and lower your monthly outgoings.
Is a Lifetime Mortgage Right for Me?
Plans are not right for everyone and it’s imperative that you fully consider & understand your options, and receive independent financial advice before you make a decision. It’s also important that, if you do decide to use an equity release product, you select one that meets your needs.
Remember that taking it’s generally a longer term option. However, there are flexible plans available that may fit your varying needs and some will allow you to repay it in the future without any penalties. A financial adviser can help you find a plan that is controlled by the financial conduct authority and that will work for you.
Chat with an adviser to get the best equity release advice, answer all your questions, and see how much you can release now. Use our equity release calculator now.
Everything related to equity release is better than it used to be. After reading about what a lifetime mortgage is, how to calculate is, and how much it’ll give you, you should have a better idea if it’s the right thing for you or not. However safe it may be to take out a plan; it might not be in your best interest. Make sure you do your research and feel free to ask us any further questions.
How Much Can You Release?
Most people are using Equity Release as a means of retaining the use of their house while also obtaining a lump sum or a steady stream of income. Get matched with an expert and check your eligibility for equity release options.
Use our free equity release calculator & see how much you can release today.
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