Can Equity Release Be Paid Back Early?
Equity release can be an invaluable tool later in life to aid with any expenses or lifestyle requirements you may have. As mortgage advisors in Newcastle, we understand the complexities of equity release products and lifetime mortgages and the questions you may have in relation to circumstances that may arise years after you have taken out the policy.
A very important part of our discussion with every customer is their plans or potential future plans and whether they anticipate that may need or want to pay their lifetime mortgage back early for a variety of reasons.
With so many lenders and so many products to choose from, there is a huge array of early repayment structures which we will guide you though to ensure the most suitable product is chosen.
What are early repayment charges?
In short, equity release can be paid back early, however as the terms of the agreement in essence are based on the loan not being repaid until after you move into long term care or pass away, in many cases, you can incur a penalty for early repayment which is called an Early Repayment Charge.
The terms of the early repayment charge with each lifetime mortgage can differ significantly. As a result, the precise penalties for early repayment will vary in each case. As equity release mortgage advisors, we can help you understand what early repayment will mean for you in your lifetime mortgage agreement. We will guide you through the agreement ensuring that any questions you have are answered. A lifetime mortgage is a long-term product, and thus understanding if it is right for you is essential. We can help.
How much does it cost to repay a lifetime mortgage?
If you do not yet have a lifetime mortgage or are unfamiliar with the concept, lifetime mortgages are a form of equity release. If you own your home and are aged 55 or over, you can release a percentage of the value of your home. As the name suggests, the intention of a lifetime mortgage is that it lasts the duration of your life and that the balance you owe will not be repaid until you pass away or move into permanent care.
However, there are occasions in which a customer may want or need to repay their mortgage early and, in these circumstances, an early repayment charge can apply.
The length of time in which charges apply and the way in which they are calculated vary quite significantly, with the term of the charging period running anywhere between 4 and 15 years and the actual charge calculated from as low as 5% of the original loan amount up to 15% of the balance on redemption with some providers.
Whatever your personal future circumstances may be, if you need to release equity in Newcastle, we will ensure you choose the right mortgage for you.
Get in Touch
If you would like to discuss your options for a lifetime mortgage, get in touch. We are qualified and highly experienced lifetime mortgage specialists in Newcastle, and we bring a friendly smile and trust to everyone we help.
Lifetime mortgages can help you live in comfort and security in old age, but it may be that you are also concerned about leaving something behind for your family. With appointments over the phone or in the comfort of your home, we can address all these questions–give us a call today.
