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Equity Release

Note: UK Property Finance offer regular Equity Release, Lifetime mortgages, where our clients remain owners of their properties. We do not offer Home Reversion schemes where properties are effectively sold to the provider.

Equity Release Calculator

Use our exclusive equity release calculator to find out how much of your home’s value could be released as a tax-free cash payment.
Call anytime to discuss the potential benefits of equity release in more detail, or if you would like help assessing your suitability for equity release.

What is Equity Release?

Equity release is a popular option among homeowners aged 55 and over, who are asset rich but cash poor and are looking to release equity tied up in their home.

The basic mechanics of an equity release scheme are relatively simple:

  1. A Loan is raised against the value of your home.
  2. The maximum loan achievable is usually calculated by age, gender, and property value. The older the client, the more can be raised.
  3. The approval of the loan is not based on income, credit etc.
  4. The equity release company puts a charge on the security property in the same way as a regular mortgage company would. This is charge is removed following payment of the Equity Release loan.
  5. The length of the loan (term) is agreed at a fixed interest rate. If still living in the property at the end of the agreed term, you can never be asked to leave.
  6. Monthly payments are rarely required. The monthly interest generated throughout the term of the loan is instead added to the initial loan advance and repaid when the property is sold. This is usually following an agreed period after death or movement into long term care or after a regular sale.
  7. The loan amount including interest will never exceed the value of the property.
  8. The agreed loan is a tax-free payment.
  9. You continue living in your home until you die, go into long term care, or decide to sell.
  10. Following the repayment of an Equity Release mortgage, any additional funds will remain with the client or go to the client’s estate.
  11. Equity Release mortgages can also be used to purchase property.

Increasingly, retirees and elderly individuals across the UK have limited finances, while owning a valuable property. It is not uncommon for an individual with a minimal pension and no additional savings to have hundreds of thousands of pounds in equity tied up in their own homes.

Equity Release can tap into this equity in the form of a tax-free payment, while the borrower remains living in the property.

Key Considerations with Equity Release

A competitive equity release scheme can provide quick and relatively easy access to the cash tied up in your home, however, not all situations are open for Equity Release.

Lenders impose their own restrictions and qualification criteria, which may include property type, current market value, condition, the applicant’s state of health and so on. Age restrictions also play a role and most providers impose a minimum age requirement on the youngest applicant of 55 or 60 years.

Our exclusive online equity release calculator has been designed to provide a basic overview of the options available for qualifying homeowners. Simply by entering your age, the approximate value of your property and outstanding mortgage balance, you will be provided with an estimate of how much of your home’s value could be released.

Alternatively, call anytime for an obligation-free consultation to discuss the available options in more detail.

Age of the Applicant in Relation to Equity

With all equity release providers, the maximum loan is determined by age at the time of the application. The older the person is, the more likely they are to qualify for a larger sum of money.

For example, a typical equity release scheme may enable a 55-year-old applicant to access 22% of the total value of their property. In the case of a similar applicant who is 85 years of age, they may have the opportunity to access a much larger percentage of the property’s value. This is because equity release is tied to life expectancy and the amount of time the applicant is likely to continue living in the property.

If you would like to learn more about equity release or how much of your home’s value you could access, call anytime for an obligation-free consultation.

Outstanding Mortgage Balance

It is important to note that Equity Release is only offered against the proportion of your property that you own. Any Equity Release mortgage is raised on a first charge basis i.e. the Equity Release loan raised needs to be enough to repay any mortgages or other loans secured on the property. The greater the proportion of your property you own, the more funds you will be able to access with Equity Release.

Independent Expert Advice

Equity release can be exceptionally useful and beneficial for the right candidates, though it is not for everyone, therefore, it is essential to first seek independent expert advice, before deciding whether equity release is for you.

As an experienced independent broker, we can provide the honest and objective advice you need to make the right decision. Not all brokerages are legally able to offer Equity Release mortgages and any advice given should be from a broker who holds the Certificate in Regulated Equity Release (CeRER) qualification.

Call anytime for an obligation-free consultation or email us and we will get back to you as soon as possible.

Last Updated: Apr 22, 2020 @ 11:03 am
UK Property Finance is Authorised by The Financial Conduct Authority (FCA)
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