Equity release lifetime mortgage
People in the UK have benefited from the long term rise in property prices building up large amounts of equity over their working lives yet find the value of their income diminishes through retirement.
Equity release products will offer you a flexible way to access wealth from your property when needed which can enhance the quality of life for you and your family.
By using a lifetime mortgage to access cash you retain 100% ownership of your property ensuring your wealth can be given to your family and beneficiaries.
The amount you can borrow is age related so if you are aged 55 you can release 24% rising to 44% if you are aged 70 and at age 85 you can release 58% of the property value.
Interest rates of a lifetime mortgage have reduced considerably in recent years and for lower equity percentages of the property value, rates are from 3.50% pa.
Beyond retirement age the opportunity to increase income or create liquid capital may be limited yet equity is likely to continue to accumulate in your most value asset, your property that is not providing you with any immediate benefit.
You may find your income no longer stretches as far, although you have considerable wealth in tied up in your property.
Or perhaps you have enough income with little capital and would benefit yourself of a family member if you had more capital.
Equity release using a lifetime mortgage could be an ideal way of accessing the wealth locked in your property, to benefit you and your family if some or all of the following are important for you:
|Important features of equity release
|Access lump sums tax free
|Spend the money on anything
|No interest payments to make
|Future drawdowns when needed
|Keep 100% of your property
Cash lump sums can be gifted to children and grandchildren such as to help with a deposit to buy a property.
For larger estates, you can use equity release from your home to reduce the amount of inheritance tax to be paid by your beneficiaries.
Releasing cash from your home
The most popular types of equity release is a Lifetime Mortgage by taking a one-off lump sum or drawdown mortgage and allows you keep 100% of your home.
Interest rates with a lifetime mortgage are as low as 3.65% pa and you have the option to let the interest to roll-up, pay it off as you go or make a repayment of up to 10% of the loan each year without penalty.
An alternative is a home reversion plan where you transfer all or part of your property to a finance company in exchange for a lump sum.
The advantage of a lifetime mortgage is no affordability checks are required by the lender and no evidence of your retirement income is needed to offer you capital, unlike a conventional mortgage.
The lender calculates the amount you can borrow using the value of the property, your age and if you have medical conditions, this could increase the loan to value.
Equity release can help you to access the capital while allowing you to remain in your home for your lifetime or until you move to a care home.
|Benefits of Using Equity Release Plans
|Gives you tax-free cash to spend as you wish
|You keep 100% ownership of your home
|Available to any homeowner aged 55 to 95
|Repay 10% of the loan each year without penalty
|Allows you to live in your own home for your lifetime
|No monthly interest payments to make
|Take smaller cash amounts over time when needed
|You never owe more than the value of your home
|You can use equity release to buy a new home
|Move home and take the plan with you
|Reduce inheritance tax owed by your beneficiaries
|Gift a deposit to children or grandchildren to buy a home
The lenders we recommend are approved by the Equity Release Council which guarantees you will never owe more than the value of your property.
How we can help
As independent equity release advisers we do the work for you to search and find the best mortgages from the whole market.
We also have access to unique offers not automatically offered by lenders such as free valuations to help reduce your costs.
London City Mortgages gives you the control through your dashboard to select your preferred equity release plan. You have control as to when you start your online application 24/7 on desktop, tablet or smartphone to release equity.
Lifetime mortgages are complex financial arrangements and we can help you make sense of the technical jargon, take you through the benefits of each lifetime mortgage lender. There are a wide range of products with varying features, benefits terms and conditions which can have an impact on how you change the mortgage in the future.
We can recommend the most suitable and affordable options based on your individual circumstances and needs including future flexibility to make the online equity release process easy for you.