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A Lifetime Mortgage is a form of equity release which allows you to release some of the value tied up in your home as a tax-free cash lump sum which can be used for most purposes from repaying an interest-only mortgage, helping with your daily cost of living to home improvements, buying a new car, or funding a holiday.

As property wealth becomes an integral part of later life financial planning, innovation is at the forefront of the lifetime mortgage sector with lenders constantly striving to give customers access to a broad range of products that better suit their specific needs and ideally bridge the gap between a lifetime mortgage and a standard mortgage.

And now … a revolutionary new mandatory payment lifetime mortgage has just been launched by Legal and General which they have named their “Payment Term Lifetime Mortgage”.
In essence, the Payment Term Lifetime Mortgage essentially fills the gap for a smaller, although still significant number of homeowners who are looking at lifetime mortgages but were either under 55 years old or needed a higher level of borrowing than available.

The basic concept is that mandatory payments are required for a set number of years before the mortgage reverts to a rolled-up basis, which differs significantly from other forms of lifetime mortgage by being available to customers from age 50 and allowing an increased level of borrowing if required.

For Equity Release Mortgage advice in Newcastle and the surrounding areas, we can help guide you through the process.

Interest Serviced Equity Release Explained

Equity release takes several forms, with lifetime mortgages being one of the most popular. If you own your home and are aged 55 or over, you can use a lifetime mortgage to release some equity from your home.
With a lifetime mortgage, you have the option to not pay back any of the interest accrued until you move into long-term care or pass away, although many people do choose to pay some or all of the interest each month to mitigate the effect of compounded interest on the equity in their home.

To recognise, reward and encourage customers to service some of their interest, another recent product innovation introduced by Standard Life and More 2 Life and other lenders already committing to following suit… is the option to secure a lower fixed interest rate for customers who are willing and able to commit to making voluntary payments towards the monthly interest for an agreed period of time.

Get in Touch

At North East Equity Release, we offer friendly, expert advice on all aspects of lifetime mortgages from standard roll up, to voluntary serviced interest and now mandatory payment lifetime mortgages in Newcastle and the surrounding areas.

With so many different products to consider, it is natural to have many questions about which equity release mortgage is right for you.

We are here to answer all of your questions to help you make an informed decision and provide you with expert advice and guidance as to which product is best for your needs.

For all later-life mortgage advice, we can hold appointments over the phone or in the comfort of your home.

Repaying Your Interest Only Mortgage: Equity Release 

Interest Only Mortgages come with a range of advantages that are attractive to homebuyers, such as lower monthly payments and potential investment opportunities. However, many people who have taken Interest Only mortgages out previously often find themselves coming to the end of their mortgage term without any clear way of paying off the remaining capital on the loan. This is where finding alternative means to repay an interest-only mortgage becomes crucial, ensuring homeowners have strategies in place to settle the outstanding balance when the term ends.

With a Lifetime Mortgage, you may be able to repay your Interest Only Mortgage so you can continue to live in your home. 

You can then continue to pay the interest each month on your Lifetime Mortgage to avoid the effect of compounded interest and the subsequent erosion of equity in your home,  however, you also have the option to make no monthly repayments at all, which can often help if you are nearing, or are already in retirement and therefore may have less disposable income. 

As a qualified and highly experienced mortgage adviser in Newcastle, covering Northumberland, Gateshead and Tyne and Wear, Joanne can guide you through this process. 

Equity Release Explained 

Equity Release is the “umbrella “word used to describe financial products that can enable you to release the “equity” held in your home. 

“Equity” is the value of your home less any mortgage / secured against it.

The only type of “Equity Release” product we provide advice on and recommend is a Lifetime Mortgage as this allows you to retain 100% ownership of your home. This is often referred to as an Equity Release Mortgage. Among equity release companies, we offer comprehensive advice on all questions you might have. 

Interest Only Mortgages: Equity Release via Lifetime Mortgages

With a Lifetime Mortgage, you can unlock a lump sum from your property which can be used to repay the outstanding balance on your mortgage. These funds are completely tax free as the money is already yours in the first place. 

For many people, this can be the only option for paying off the remaining balance at the end of the term of an interest only or a repayment mortgage. 

It’s natural to have questions and concerns about whether this is the right decision for you, and we will help you understand everything you need to know give you the best advice tailored to your circumstances in Newcastle. 

We will always look at all of the options available to you based on your individual circumstances and where possible recommend alternative solutions also.

Get in Touch 

For friendly advice and more information, give us a call today for best advice on repaying an interest only mortgage and equity release in Newcastle. 

Appointments can be held by telephone, video call or  in the comfort of your own home.

Get a head-start by seeing how much equity you could release from your home using our free calculator tool.

Joanne, equity release adviser, offering later life mortgage advice to a client

While entering the golden years of life, many individuals are often confronted with the realisation that their pension provisions are not enough to allow them to enjoy their retirement to the full. In recent cases, as a result of the current cost of living crisis, many are even struggling just to make ends meet.

As such, many homeowners are turning to later life retirement mortgages to release some of their wealth tied up in their homes as a solution to this problem.

What are later life mortgages?

Later life mortgages, also known as equity release or lifetime mortgages, are financial products designed to allow homeowners aged 55 and above to access the wealth that is tied up in their home which is referred to as their “equity”.

Unlike standard income-assessed mortgages, later life mortgages do not require regular monthly repayments. Instead, the borrowed amount, plus interest, can be repaid when the homeowner passes away or moves into long-term care. This makes the product highly desirable for those entering later life with reduced income although it will reduce the value of your estate for your beneficiaries.

The benefits of later life mortgages

For those entering their twilight years, financial stability and peace of mind become paramount concerns for many. Later life mortgages can help homeowners maintain their independence, realise long-considered dreams, and ensure a dignified and comfortable retirement by offering:

Access to funds: One of the most significant advantages of later-life mortgages is that they provide homeowners with an initial tax-free cash lump sum and can also offer a drawdown facility which means they also have access to further funds which can be drawdown at a later date if and when needed which can be used to cover various expenses, including home improvements, medical bills, debt consolidation, or simply enhancing their quality of life as they enter the retirement phase.

Flexible or no monthly repayments: As mentioned earlier, these mortgages have no contractual monthly repayments, however, the customer has the choice to pay some, all or none of the mortgage interest and in some cases repay capital without incurring charges in order to mitigate the effect of rolled up interest and preserve the equity in the home.

Home certainty: A lifetime mortgage is no different to a standard mortgage in that it is a loan secured against your home of which you retain 100% ownership and therefore can continue to live in your home for as long as you desire and without interference. 

Later life mortgages are designed to enable homeowners to age in the comfort of their own homes as well as having the freedom to move.

Elderly woman holding a small house in her hands

Meet Joanne: Your trusted later life mortgage expert

Navigating the world of later life mortgages can be overwhelming, with various options and considerations to explore. This is where Joanne, our retirement mortgage expert with over 30 years of experience in the business can help!

As a member of the Equity Release Council, Joanne provides clear and transparent advice taking as much time as is needed to ensure you have a full understanding of the benefits of a later life mortgage as well as any potential risks. She can offer alternative financial solutions, including checking whether you may be entitled to any unclaimed benefits whilst also ensuring that you won’t affect any current entitlement to any benefits you may already receive.

Joanne spends time to understand your personal financial situation and works closely with her clients from the very first call, throughout the whole application process and beyond. Trusted friends and family are also welcome to be included throughout the entire process.

Embrace the opportunities that later life mortgages provide and take a step closer to financial security by getting in touch today! 

older couple walking through a field with their arms around each other

Equity Release is a big financial decision and can have a financial impact on the consumer and their family so it’s important once you’ve acquired a Lifetime Mortgage that you continue to be supported by experienced Equity Release Advisers.

At North East Equity Release, we are committed to providing you with the best service and support before, during and after your application process.

After using our services to arrange your mortgage, we will always be on hand to answer any future questions you may have. We ensure our customers are given all the support and assistance they may need, whenever they need it.

We also ensure all our communications with you are delivered in a clear and concise manner and are never misleading. We spend as much time as needed to ensure you have a full understanding of the products and their potential impact on your estate.

Although it’s called a Lifetime Mortgage and interest rates are currently fixed for the lifetime of the mortgage, you don’t have to keep the same mortgage for life….

As interest rates are subject to fluctuation, lower fixed interest rates than you currently have may become available and because early repayment charges on most plans no longer run for the lifetime of the plan, in some cases it may be cost-effective to remortgage your lifetime mortgage to a new lender with a lower interest rate.

We can carry out a review of your mortgage at no cost at any time in the future to see if this is an option for you.

We will also always be on hand to help you access your drawdown facility if you have one and assist with any further borrowing if required.

If you’re considering a lifetime mortgage and would like advice from an experienced, qualified. industry professional, get in touch with our Equity Release Adviser Joanne today.

Older couple sitting at a table discussing equity options

Do you dream of spending your golden years travelling the world and engaging in all your favourite activities, but are unsure how you would be able to pay for it? If so, a Lifetime Mortgage could be your best chance of making your dreams a reality.

If you wish to improve your retirement options but are unsure if equity release is the best option, we may have the solution for you. We can assist you in determining whether later-life lending is the best course of action for your future with the help of our equity release quiz.

The quiz challenges three separate personal qualities of an individual by asking a series of questions.

Knowledge is the first personal characteristic the quiz considers. The quiz asks questions to determine how familiar you are with the concept of lifetime mortgages and helps fill in any knowledge gaps toy may have by educating you on areas you may have previously been unaware of.

It next looks at personal qualities, and asks you a series of personal questions to figure out what plans you have already made for your retirement lifestyle. Once we are aware of your specific circumstances, we can assist you in determining whether a lifetime mortgage is the most beneficial method of financing your retirement.

Qualification is the last consideration of the quiz. The simple questions will help us determine if you would be eligible for later-life lending based on your specific circumstances.

After the quiz is completed, a report with an overall score will be produced. You will be given a score for each of the three considerations, a summary of all three sections, a total score that is the average of the three, and recommendations for your next course of action.

This quiz can be beneficial if you are considering equity release as it gives you an instant personalised report that is entirely unique to you. It can help you better understand your strengths and weaknesses and give you a better understanding of how an equity release adviser can assist you before you get in touch.

It is important to remember that navigating your finances through later life and into retirement can be tricky, especially as there are now so many options available to those aged 55+. Expert advice is crucial to ensure the best outcome based on your specific and individual needs.

If you are considering a Lifetime Mortgage after completing the quiz, our highly experienced Equity Release Adviser is here to take you through the next steps.

With a better understanding of your situation, Joanne will be able to offer you specialised guidance and assist you in exploring all of the options that are available to you in a clear and concise manner.

Get in touch with Joanne today for quality, professional advice on equity release.

Face-to-face solicitor conversation with elderly couple

Equity release is a complex financial decision that requires a comprehensive understanding of an individual’s circumstances and future aspirations. Today we explore the value of engaging in personal, face-to-face meetings with industry professionals during the equity release process. 

Protecting potentially vulnerable individuals

Equity release is beneficial for many people, however as this product is only available to people aged 55 and over, a lot of potential candidates for equity release are elderly and they may lack family support. Some may be particularly vulnerable and/or have limited financial literacy.

Equity Release professionals, such as solicitors, play a crucial role in safeguarding the interests of these individuals. Meeting in person allows equity release solicitors to ensure that individuals are fully capable of making informed decisions and can identify signs of vulnerability or undue influence.

De-mystifying equity release products

As there are legal and financial aspects to be considered when choosing an equity release product, after the help of a qualified advisor to make an application for the right product, the guidance of a face-to-face solicitor is imperative to further ensure comprehension of the mortgage contract and the implications and potential risks associated before legally proceeding.

At North East Equity Release we use trusted, specialist equity release solicitors to ensure complex legal jargon is explained to our clients in a face-to-face meeting and in a way that they understand, helping them to navigate the fine print and minimising potential misunderstandings.

Using Equity Release Council members

As members of the Equity Release Council, we are committed to recommending qualified equity release solicitors who are also part of this industry-renowned trade body. We want to ensure that our clients are receiving the best, independent legal advice and are fully aware of the legal obligations and financial implications associated with an equity release plan.

Customer protection is a priority at North East Equity Release and we ensure every client receives impartial and independent legal advice and are aware of all of their options before proceeding. Get in touch with Joanne today to learn more.

Family on an equity release phone call

Equity release is a huge decision that can directly affect your family. Therefore, involving your loved ones in the process from the get-go ensures that they understand the choice you’re making and why.

Inheritance protection for your loved ones

When you choose to release equity, this can result in your family being left with a smaller inheritance or no inheritance at all when you pass away.

However, there is the option of opting for a plan that has an Inheritance Protection Guarantee. This protects part of the value of your home and, as a result, leaves something behind for your loved ones.

For example, out of the funds available, you may choose to take out a smaller percentage in order to leave the rest behind for your family to receive after your passing or once the house has been sold.

Involving your family in the process, whether you have a protection guarantee or not, lets them know that you’re planning on releasing funds from your property and the reasons why.

How can North East Equity Release help?

Our advisors can help you to set up a meeting or call with your family to discuss your decision and reassure them by answering any questions they may have.

In this meeting, your family may wish to clarify aspects of the process or discuss things that you may not have considered.

Equally, this is a good opportunity for your loved ones to get to know us and understand that we are giving the best advice possible that’s suited to your situation.

A family meeting or call allows you to relay how inheritance will be affected, and you may wish to emphasise that the equity released is to support family members while you are alive, whether that be helping a grandchild step onto the property ladder or contributing to the costs of a loved one’s wedding.

We’re here to support you through the equity release process. Contact us or call us on 0191 695 9493 for FREE advice on how to get your family involved in your equity release plan.

Equity release in return for 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.

There are lots of different options when it comes to lifetime mortgage products, with many lenders offering plans with a drawdown facility. This means that instead of releasing equity from your home as a single lump sum, you can take out an initial advance and then the rest you are able to draw from as and when you like while maintaining full ownership of your property.

This allows you to flexibly manage your equity and provides quick and easy access to funds without further administration costs.

Am I eligible for a drawdown lifetime mortgage?

You have to own your property and be over the age of 55 to be eligible for a lifetime mortgage.

There are also a number of variables that can affect how much you borrow, including your health, your property’s value and the type of property you live in. Our advisers can discuss your circumstances and contact suitable lenders that are likely to approve your application.

old couple contemplating equity release whilst looking out over a lake

What is the process?

When you apply for a drawdown lifetime mortgage, your lender will calculate the cash facility based on loan-to-value percentages. Once this is calculated, you can decide on how much money you would like to withdraw. The remaining cash will be held by the lender in the drawdown facility and can be accessed in a matter of weeks if you need it.

The drawdown lifetime mortgage will only have to be paid back when you die or move into long-term care. In these circumstances, your property will be sold and the money from the sale will be used to pay off the loan.

What about interest rates?

You will never be charged interest on the cash left in the reserve with the lender – you are only charged interest on what you decide to withdraw.

What are the benefits of a drawdown lifetime mortgage?

The main benefit of opting for a drawdown lifetime mortgage as opposed to releasing equity as a cash lump sum is that you have the freedom to release money as and when you need it and it can be spent on whatever you wish.

By taking out smaller amounts of cash, a drawdown lifetime mortgage is less likely to affect your state benefits.

Finally, by only paying interest on the money that you draw down, there is a reduced impact on inheritance and the amount you can leave for your loved ones.

It is important that you get specialist advice before applying for an equity release plan. We have arranged a number of successful drawdown lifetime mortgages for our clients and have built strong relationships with a number of UK lenders.

We are here to support you from application to completion. Contact us today for a free, no-obligation consultation.

The Equity Release Market is constantly evolving. Providers of equity release products are continually innovating to create flexible lifetime mortgages and other products to suit clients in a variety of financial and personal circumstances.

Following the growth in popularity of equity release products in 2021, approximately 20,000 new customers have already unlocked wealth in their properties in the first quarter of this year.

Piles of coins with small model houses on top

How are Lifetime Mortgages adapting?

The Equity Release Council confirmed this week there are now 665 mortgage products available in the marketplace which is an increase of 65.8% from 401 products in just 2 years since 2020 as lenders continue to provide more flexibility and innovative features to provide a better solution for more customer circumstances.

One provider has just launched a new lifetime mortgage with early repayment charges that only last for the first 5 years, making the product more reflective of a standard mortgage with an unsurpassed increase in potential LTV ratio of 60.7% for those clients looking for the maximum cash release (subject to age)

How can we help?

The explosion of new products to the Equity Release Marketplace can feel overwhelming for prospective customers. By working with North East Equity Release, we can help take the stress and anxiety out of finding the right product for you.

We will take the time to research the whole of the market and assess the features, benefits, drawbacks and penalties involved in every Lifetime Mortgage product.

Whether your priority is inheritance protection or you are concerned about early repayment charges, future home moves, interest rates or how equity release could affect your state benefits, we have the answers to your most pressing questions.

Elderly couple high-fiving while holding documents.

Remember that with any Lifetime Mortgage product, you’ll always keep your home until you move into long-term care or pass away.

If you’re interested in learning more about Flexible Lifetime Mortgages, don’t hesitate to get in touch. We offer a free, no obligation consultation, free of any unnecessary jargon.