Most people believe Equity Release to be inflexible, permanent and expensive and it is fair to say 10 years ago that was the largely the case.
In very recent times however, the cost of lending when only a fairly small proportion of the equity from the property is released, has dropped from around 7-8% to figures below 3%. In doing so this has opened up these products to home owners who would previously been put off with the prospect off the debt doubling every 10 years or so.
New propositions allow clients with sufficient retirement income to pay the interest or some of it, to prevent or reduce the “roll up” of interest.
Flexibility has been increased with the advent of fixed fees. Now many loans can be repaid without additional penalty after 10 years and if a partner on the mortgage dies, the survivor will have 3 years to repay the loan penalty free during the initial 10 years if that is what they wish to do.
Clearly this type of advice can be complex but with this new flexibility many customers can be helped, where previously there were no personalised solutions available for their specific circumstance.
Alexander Beard can guide you through the choices and options, to arrive at a solution best to fit yours or a loved ones needs.
This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration.
Our initial charges are usually £495 and we may also receive a fee from the lender; the precise amount will depend on your circumstances.
Mike Shakespeare Partner - Financial Planning (UK)