How does equity release work

Taking out an equity release mortgage is a big decision and you need to be 100% sure it’s the right choice for you. The following questions are the main ones we always get asked on equity release schemes, but if you have any other questions, please get in touch. We will be happy to help.

Learn more about our equity release services here.

How does equity release work

Are there Monthly Payments?

This depends on which product you decide is right for you. With a Roll-up Lifetime Mortgage, you don’t make any payments through the life of the mortgage and any interest and charges are added to the loan each month. An Interest Payment Mortgage gives you the option to pay all or some of the interest off each month.

How much can I release?

Equity Release Mortgages work differently from conventional mortgages with lenders offering more the older you are, and the poorer the state of your health. The amount they will lend is also dependent on the value of your property. The amounts lent do vary from lender to lender but please see the guide below to obtain a good idea of what’s possible.  Please contact us for exact details and a full illustration.

Age Min LTV Non-enhanced Max LTV Enhanced Max LTV Age Min LTV Non-enhanced Max LTV Enhanced Max LTV
55 10.0% 25.5% 39.1% 73 28.5% 45.6% 55.5%
56 11.0% 26.5% 40.2% 74 29.0% 46.8% 55.5%
57 12.0% 27.5% 41.3% 75 30.0% 48.0% 55.5%
58 13.0% 28.5% 42.4% 76 31.0% 49.2% 55.5%
59 14.0% 29.5% 43.5% 77 32.0% 50.4% 55.5%
60 15.0% 32.0% 44.6% 78 33.0% 51.0% 55.5%
61 16.0% 33.0% 45.7% 79 33.5% 51.5% 55.5%
62 17.0% 34.0% 47.3% 80 34.5% 52.0% 55.5%
63 18.0% 35.0% 48.4% 81 35.0% 52.5% 55.5%
64 19.0% 36.0% 49.5% 82 35.0% 53.0% 55.5%
65 20.0% 37.0% 50.6% 83 35.0% 53.5% 55.5%
66 21.5% 38.0% 51.0% 84 35.0% 54.0% 55.5%
67 22.5% 39.0% 51.8% 85 35.0% 54.0% 55.5%
68 23.5% 40.0% 52.9% 86 35.0% 54.0% 55.5%
69 25.0% 41.0% 54.0% 87 35.0% 54.0% 55.5%
70 26.0% 42.0% 54.5% 88 35.0% 54.0% 55.5%
71 27.0% 43.2% 55.5% 89 35.0% 54.0% 55.5%
72 28.0% 44.4% 55.5% 90+ 35.0% 55.0% 55.5%

Will it affect my state benefits?

Equity release products can affect your eligibility to certain state benefits depending on the amount you wish to release. We will assess this during the fact-finding process.

Can Equity Release be arranged under Power of Attorney?

Yes, but but we will need understanding of what type of Power of Attorney is in force and when it was taken out.

What Power of Attorney do I need?

Although all types of Power of Attorney are acceptable, it is generally advisable to arrange a Lasting Power of Attorney (LPA). This allows the person, who is given this authority, to manage your finances or make decisions relating to your health and welfare.

What are ERCs?

This stands for early repayment charges which is a fee payable to the lender if you redeem some or all of the mortgage early.  These are not usually payable if the mortgage is being paid off because the borrower is entering long-term care or dies.

What is Porting?

Porting involves transferring your existing deal with a lender from one property to another. This is a useful way of avoiding product ERCs but the new property does need to meet the lenders criteria at the time of the move.