Is now the right time to get a Lifetime Mortgage?

If you’re in two minds about whether to free up some of the wealth attached to your home, it’s important that you are aware of up-to-date and accurate information on equity release in the UK.

What is equity release?

The term ‘equity release’ can sometimes be difficult to understand, but in simple terms, it refers to the process of letting homeowners aged 55 and over release tax-free cash from the value of their home.

The amount you can release is based on your age and how much your home is worth.

You can access the money as a cash lump sum at the outset or as a facility to access on an “as and when” basis at any time in the future.

The most popular type of equity release is a lifetime mortgage.

Lifetime mortgage

There are many positives to applying for a lifetime mortgage, such as:

●      You can take out a lump sum of tax-free cash in one go

●      You have the freedom to spend this money however you want

●      Releasing equity with a lifetime mortgage means you don’t need to move out of your home or downsize

●      There’ll be nothing to repay until you die or move into full-time care

Is now a good time?

If you are considering taking out a lifetime mortgage, now could be a good time to enquire, as mortgage lenders are slowly starting to reduce their interest rates following the spike in interest rates post the mini budget in September 2022.

The current average lifetime fixed mortgage interest rate as of December 2022 is between 6-7%, depending on the lender.

The highest rate seen in November 2022 was 8.95%, illustrating a significant drop in the space of just a month, with experts predicting the pricing of fixed mortgage interest rates to continue to stabilise throughout 2023

The interest rate you will be offered will depend on different factors, such as your age, the level of your requested loan in relation to the value of your home and other features included in your plan.

Considering a lifetime mortgage? Our qualified equity release advisor Joanne can help you find lenders with good interest rates.

Contact us to see how we can help.