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letter blocks spelling 'equity'

If you are thinking about releasing equity from your home, you may be wondering just how much you can borrow exactly.

What is Equity Release?

Equity Release is the term used where homeowners over the age of 55 access their property wealth by releasing a tax-free cash lump sum, usually by way of a mortgage designed to assist later life borrowers called a Lifetime Mortgage which is not income assessed.

How much can I borrow?

The maximum amount you can borrow is mainly based on age and the property value.

However, there are several variables that may also impact on how much you can borrow, including your age, health, the value and condition of your residential property and whether or not it is a joint application that you are making.

Your age

Age is the primary determining factor when it comes to how much you can borrow.

Put simply, the older you are, the more you are to be able to borrow.

If you are closer in age to 55, you will not be able to borrow as much as someone who is 70+.

This is due to life expectancy, so if you choose not to service the interest and allow it to roll up over the lifetime of the mortgage, the lender needs to be assured that there will still be enough equity in the property at the point of sale to repay the loan including any interest accrued. As such, the potential term of the mortgage needs to be factored in, too.

The value and condition of your property

This is an important factor when determining how much you can borrow.

Your property will be subject to a professional valuation prior to your loan being approved, in order to ensure the lender can be confident that they are lending against a property that will maintain or increase in value over time.

As such, factors including the area, type of property, overall condition, the building’s materials, average house prices in the area and potential growth will be assessed.

If you are wondering how much you could borrow with Equity Release, we can help. Get in touch today.



Can I arrange an equity release mortgage without an adviser?

So, you’ve conducted internet research, decided equity release is the right fit for you and discussed your plans with friends and family.

You are now ready to find an equity release provider and take the plunge, right?

Wrong. If you are considering freeing up the wealth attached to your property, it is important to know that you can only make an application to most equity release providers via a qualified equity release adviser. They will ensure your individual personal circumstances have been fully considered and you have been provided with advice and an appropriate recommendation.

In this blog post, we discuss the reasons why having an equity release adviser is so important:

Protect your beneficiaries

You may be concerned about how equity release will impact what you are able to leave behind for your loved ones. If leaving an inheritance is at the top of your priority list, you need to discuss this with a qualified equity release adviser who will be able to find a lender that gives you the option to add an inheritance protection guarantee to your equity release plan. It is important to note that inheritance protection will have an impact on the maximum loan amount that you are able to take out.

Avoid negative equity

It is essential that the lender you choose is approved by the Equity Release Council. Lenders that are approved are required to offer a no-negative-equity guarantee – this means that you will never pay back more than what your home is worth.

A qualified equity release adviser will be able to recommend responsible providers that are authorised by the financial regulator to provide equity release plans.

Get the right product for your circumstances

Another reason that you should get support from an equity release adviser is because of the extensive knowledge that they have of different equity release schemes available. As later-life lending is becoming increasingly popular, new products and features are appearing, making the market more difficult to navigate. An equity release adviser will be able to explain the differences between the main equity release schemes: lifetime mortgages and home reversion plans and offer advice on how these will affect your finances.

equity release adviser talking to elderly couple

Discuss alternatives

Equity release is not for everyone. A qualified equity release adviser will discuss alternatives with you, such as downsizing, using savings and retirement interest-only mortgages, to help you live a comfortable retirement.

At North East Equity Release, we are members of the Equity Release Council and are committed to offering personal and professional service to each and every client. We have your best interests at heart and there is never any obligation to go ahead with a plan.

For a free informal chat, contact us here.

Standard mortgage repayments can become a source of stress for many older people during their retirement or those hoping to retire early.

An Equity Release Lifetime Mortgage could provide a viable and accessible solution.

So, let’s say that you have a standard interest-only mortgage. You know that your mortgage is coming to the end of its term shortly, however, you have no repayment plan in place that will enable you to pay it off. Your pension income doesn’t leave a lot of wiggle room to facilitate your repayments, and you certainly don’t wish to sell up and move at this later stage in life.

This is a common predicament that many older people find themselves in.

So, what’s the solution?

Luckily, there are a number of suitable equity release products available on the market that can enable you to pay off your mortgage if you are aged over 55.

With an Equity Release Lifetime Mortgage, the amount you can release varies from 21-56% of the value of your home depending on your age. Different lenders offer a variety of plans and our experienced advisers can help you to find the most suitable plan for you and your circumstances.

miniature toy couple stepping on coins towards standard mortgage home

How does it work?

Basically, it is just a more flexible type of mortgage with no end term as it does not need to be repaid until you (or the surviving partner for joint applications) move into long term care or pass away. It gives you the choice from roll-up plans that do not require any monthly repayments at all to interest-serviced plans and plans that allow you to repay the capital if required, there are a multitude of options out there.

Once your mortgage application has been processed and finalised, your standard mortgage will be repaid and from this time onwards, you will no longer be contractually required to make any further monthly payments to your mortgage lender.

If you are keen to explore equity release as a viable way for you to pay off your mortgage, contact us today. We are proud to offer a free, no-obligation consultation, free of unnecessary jargon.