Equity Release

Equity Release enables you to access the equity tied up in your home if you are over the age of 55.

Most people who take out Equity Release use a Lifetime Mortgage*. Lifetime Mortgages differ from lender to lender and we provide you with full advice and make recommendations to you, taking time to understand your circumstances.

A Lifetime Mortgage is a loan secured against your home, providing you with a tax-free sum that you can take all at once or in smaller amounts.  Taking smaller amounts may incur different interest rates, depending on the rates available at the time.

It’s entirely up to you how you spend the money that you release from your property.  Whether it’s home or garden improvements, helping a family member onto the property ladder, supplementing your pension income or repaying an interest-only mortgage debt.  Equity Release is a big decision and there are many factors to consider, especially if securing debt against your home.  For this reason, it is only possible to get a lifetime mortgage through a lifetime mortgage adviser.

Lifetime Mortgages differ from lender to lender and we will take time to understand your circumstances before providing you with full advice and make recommendations.

*This is a lifetime mortgage. To understand the features and risks please ask for a personal illustration.

 

Advantages

You still own your home
Your home remains legally yours until it is sold once you or your partner pass away or move into long-term care

No negative equity guarantee
Providing your house is sold for the best price possible, you will not pass any debt onto your estate or family when you pass away or move into long-term care

Options for withdrawal and repayment
It is possible to either take a one-off cash sum, or a smaller lump sum and cash reserve to draw from. You only pay interest on the money withdrawn and repayments can be made. Further details are available from our advisers

Tailored interest rate
The interest rate is tailored to each individual equity release application, therefore you’ll always get a fixed rate that will never increase

Inheritance guarantee
You can protect a percentage of your home’s value as an inheritance for your loved ones.  This may, however, reduce the amount you can borrow. Further details are available from our advisers

 

Disadvantages

Reduced inheritance
Whilst you can protect a portion of your home’s value as inheritance, its sale goes towards paying off your lifetime mortgage, therefore the amount you can leave as inheritance will reduce

Potential impact to tax and welfare benefits
Equity release can change your tax status and potentially affect eligibility for welfare benefits. Our advisers will explain the impact to your personal situation

Added interest
Interest is added annually to both your loan and interest already added, which increases the amount you owe.  Everything is repaid from the sale of your home, once you pass away or move into long-term care

Lifetime commitment
If you decide to end your lifetime mortgage early, you may have to pay an early repayment charge

 

 

Examples of how Equity Release can work:

Mr & Mrs B, aged 60 & 62

Borrowed £106,950 against their property valued at £345,000. With no children to provide for, they used this money to carry out extensive renovations and provide an income. The lifetime mortgage had a no negative equity guarantee and fixed rate of £5.37%. The funds were released within 4 weeks from the offer being made.

 

Mr & Mrs G, aged 74 and 82

Wanted to buy a new car, boiler and go on holiday. Having spoken to their children, who were happy with their choice, they borrowed £30,000 against a property worth £285,000 with additional draw down available of £60,345. The lifetime mortgage had a no negative equity guarantee and fixed rate of 3.64%.

 

Mr & Mrs W

Wanted to move to a new property, as the running costs of their existing period property were proving to be too much. They borrowed £229,250 to buy a property worth £655,000.

 

Brancaster House’s typical fee for a lifetime mortgage is £895; additional lender fees may apply.

To find out more about Lifetime Mortgages and how they work please get in touch to speak with one of our Mortgage and Protection specialists.

Subscribe to our Mailing List