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Find out how much you can release
Use the equity release calculator below to discover how much money you could release from your home, for anything from bills to the purchase of a second home or a holiday home. Once you have received the estimate from our lifetime mortgage calculator, contact us for financial advice relating to equity release, and we will inform you of the further details that may affect your decision such as interest rates, receiving a lump sum vs regular instalments, and the repayment requirements.
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You can expect to release between 30-60% of your property’s value with an equity release lifetime mortgage.
It goes without saying that the loan amount will differ depending on how valuable your property is, as 30% of a £500,000 property is going to be a much more significant amount than 30% of a £100,000 home.
Your age also has an impact on the money you can release, and we will explain this later on.
For now, you need to know that a 55 year old could release a maximum of 33.2% of the value of their property, whereas a 99 year old (if they were eligible) could release up to 57.9%.
Home reversions work differently, as they require you to sell 25-100% of your home to an equity release lender.
You will not be offered the full market value of your home, so keep this in mind if you are deciding between releasing equity and selling your home to downsize.
To be eligible for an equity release loan, you need to own a property that is worth a minimum of £70,000. You must also be aged 55 or over.
You will need to pay off your existing mortgage, either before you take out equity or by using the equity release funds to pay it off.
Some equity release lenders expect you to meet further requirements, such as being under 85 or living in a certain location. However, if you do not meet this specific criteria, you could always find a lender with a more flexible criteria.
The first factor that affects how much money you could release is your age. If you are just 55, you are less likely to be entitled to a large loan, and you may have to pay higher interest rates.
This is because the lender gets more out of offering a loan to an older applicant whose home is likely to be sold within a shorter space of time than yours, given that they are more likely to pass away or enter long-term care in the near future than you are.
Another important factor that influences your loan amount is the value of your property.
The more money that is tied up in your home, the less risky the decision is for the lender to offer you a loan.
The same applies if your property is in a desirable location where house prices are rising rapidly, and if it is kept in great condition.
Finally, if you qualify for the enhanced lifetime mortgage, you could release a much larger amount of money than is standard. You would either have to be above a certain age, or you would have to be able to prove that you have one of the qualifying health conditions.
Some of these include: high blood pressure, cancer, and heart conditions. You may also be eligible if you take prescription medication or if you left work as a result of health issues.
The enhanced lifetime mortgage offers higher loan amounts and lower interest rates. You could expect to release up to 43.6% of your home’s value at the age of 55, and 57.9% at 99 years old.
If you are hoping to take out equity from a property that you do not permanently live in, the percentage of the property’s value that you will be entitled to is lower.
A 55-year-old could release 19% of their home’s value either for a second home or a buy-to-let home, while a 90-year-old could release 44%.
As you can see, it is much more profitable for an older homeowner to use equity release products as they will access higher loans, lower interest rates, and their interest will not reach as high an amount, given that it will accumulate for a shorter amount of time.
This means that if you are on the younger side for an equity release consumer, we would advise you to carefully consider whether equity release would work for you.
Please do not dismiss the scheme entirely, as repayments are not required, so you would not have to think about how you could afford the higher interest rates.
What’s more, there are certain equity release plans with lower interest rates and various other benefits, so it is advisable to shop around before deciding that equity release is not for you.
The best thing to do is seek legal advice and financial advice as well as equity release specific guidance, so that all bases are covered. It may even be possible to avoid an advice fee if you go to the right places.
Generally, the amount you release is more dependent on your property value and your age than anything else. This means that there will not be a significant difference in the amount you can release with different equity release arrangements.
However, your financial situation could be completely different depending on which equity release plan you select. This is because you could either receive monthly payments, or a lump sum of tax-free cash.
With lump-sum payments, you may decide to purchase a family holiday, a new home, or a new car, whereas the monthly payments may help you with things like paying gas/energy bills, buying food, and saving for later life care costs.
Firstly, if you improve your credit rating, you could have access to higher loans and lower interest rates as the lender would trust that you are a reliable borrower.
Having said that, it isn’t always important to have a good credit rating as you do not have to repay the equity loan, so you should check what each lender demands.
Secondly, if you have a certain disability or you are above a certain age, you could boost your equity loan by taking out an enhanced lifetime mortgage and making the most of its many benefits.
You would have to agree to provide medical notes to demonstrate proof of your disability in this scenario.
It is also a good idea to keep your property in a good condition so that lenders are more likely to offer you a higher loan.
There is not too much you can do in terms of value, but if you did want to move into a higher value home, you could release equity from this home and get more money from a lender.
Finally, you could wait until you reached a certain age to release equity. However, if you are in desperate need of money, we would not recommend doing this.
Even people aged 55 can access a large amount of equity release funds, so do not worry that your loan amount would not be high enough.
Besides, you would be consulting an equity release adviser before receiving your loan, so you would get an estimate for a loan amount that you could reject if it was too low.
The interest rate on equity release is between 3-6%. As we have mentioned, you could access lower interest rates by being older, having certain health conditions, and selecting a plan or a lender with low interest rates. The average interest rate for equity release is currently 4.5-5% (1).
Equity release involves compound interest, so even if the interest rates are low at face value, the interest will accrue and often reach a very high amount by the end of the scheme.
Some equity release consumers choose to repay this interest as a way of avoiding being in a lot of debt. This is a sensible choice if you have the money to do this.
However, you will never have to pay back more than you borrowed if you have a no negative equity guarantee, so it may not be worth repaying it.
You can calculate the amount of interest you would be charged using an equity release interest calculator.
Often, you will be able to find out what the minimum and maximum interest rate would be, what the average interest rate is, and how the rate of interest could change if you enrolled on the enhanced lifetime mortgage.
All you need to do is find the equity release calculator on our website, and select your age, the value of your home, and whether it is a house or a flat.
You will then receive an estimate of how much money you could release using the equity release scheme. You will not receive an estimated interest amount, but you can find this out when you start to get more involved with the equity release scheme.
We used the calculator ourselves to demonstrate how easy it is to find out what your loan amount is likely to be.
To start with, we stated that we were 55 years old with a flat worth £100,000. The calculator estimated that we would receive up to £21,675.
Then, we stated that we owned a house worth £400,000 and we were 80 years old. This time, the figure was £208,000.
You will notice that you cannot select an age below 55 years, or a property value below £75,000. This is because you would not be eligible for equity release if either of these applied to you.
With a £70,000 property, you may be able to find a lender who is willing to work with you, but the age requirement is non-negotiable.
When you get an estimate from our calculator, you will see that there is some information below the figure that advises you to speak to one of our equity release specialists for a more accurate prediction of your loan amount.
There is a space where you can fill in your contact details to facilitate this. We will not ask you for your financial information unless we are in an official consultation, so you will only be informing us of your name, age, property type, property value, home address, email address, and phone number.
Some of our potential customers worry about being contacted all the time once they have sent us their details.
This should not concern you, as we only need your information to get in touch with you about arranging a free consultation. If you reject this, we will not keep contacting you.
Our equity release calculator is very accurate. However, it does not ask you for your personal details including financial details, so it will never be as accurate as our personalised quotes.
Please also remember that you will only be certain about your loan amount when you have had a property valuation, which will take place after you apply to an equity release lender.
If you are interested in unlocking the money that is tied up in your property, the best place to start would be to find a professional equity release adviser who is regulated by the Equity Release Council (ERC) (2).
Equity release as a scheme is regulated by the Financial Conduct Authority (FCA), so you do not have to worry about it being unsafe (3). Everything that happens with equity release is above board.
When you find the right adviser for you, they will explain what the different equity release plans are, and how they could affect how much money you are offered, what the interest rates are, and what you can spend your loan on.
They will then guide you through making an application to an equity release lender either as an individual or in a couple. This process should not be too difficult, especially with the adviser there to explain which sections you need to fill out.
It usually takes around one week for the application to be processed, and after this, you can expect to wait an additional 5-7 weeks for your equity loan to be offered to you.
There are some things you can do to speed up the process, such as doing adequate research, making sure you are available for appointments, and responding to your adviser’s and lender’s requests as soon as you can.
Some examples of things that may delay the process are: applying at a particularly busy time, being indecisive about which equity release provider or plan you would prefer, and not being available to attend appointments with your lender, adviser(s), or solicitor.
Call us any time from 8am-8pm any day of the week on 0330 058 1579 to get started with your equity release journey.
We offer a free consultation to answer any questions you still have about the scheme, and to provide a more accurate quote on how many funds you could release from your property.
If your loan estimate is too low for equity release to be worth it, we can suggest alternatives to equity release such as remortgaging your property, using traditional loans, downsizing, returning to work, and budgeting.
However, most of our customers find that they can release enough money to do what they want to.
This is because property prices have risen significantly since they bought their house, so they can get much more money out of their home in the current market than they invested when they bought the home.
[1] Should you equity-release? https://www.moneysavingexpert.com/mortgages/equity-release/
[2] About Us https://www.equityreleasecouncil.com/
[3] Welcome to the Financial Conduct Authority https://www.fca.org.uk/
An equity release calculator is a useful tool for anyone who is considering releasing money from their property as a way of boosting their income before or during their retirement.
All you have to do is fill out your details, which involves selecting the type of property you own (e.g. a house or an apartment), the estimated value of said property, and your age (which must be over 55).
The calculator will calculate how much you may be able to release from your home. This is an estimate, so the figure may change when an advisor learns more about your situation and advises you on the amount that you can borrow when you apply for a loan.
To get a more accurate idea of the amount available, get in touch with us and we will provide you with a quote that reflects the demands of lifetime mortgage lenders.
You can learn more about equity release by reading our help centre.
We recommend using our calculator as it is quick and easy to use. It’s a great way to see how much tax-free cash you could receive without having to make an estimate yourself. We keep your data safe, so do not worry about entering your details below.
What’s more, we do not ask for personal details until you call us, so you will not have to input your name, address, or anything else linked to your identity.
Equity release involves taking out a loan on your house that you do not have to repay on a monthly basis, but instead, is paid back when your property is sold after you die. The borrower is usually expected to stay in their house for the rest of their life as part of this agreement.
There are many equity release plans available. They come under two general types: lifetime mortgage and home reversion.
We recommend finding a firm that is regulated by the financial conduct to learn more about this. One way to do this is to contact us on 0330 058 1579. We are available to talk to on a daily basis from 8am-8pm.
This type of equity release involves taking out an equity release loan with a fixed interest rate that must be paid back when you pass away. There are many different plans you could settle on, including (but not limited to) the voluntary repayment plan, the income-only plan, and the interest-only mortgage.
There are often borrowing limits for this type of mortgage, which tends to be 60% of the value of your property as a maximum.
If you attempt to repay the mortgage early, you could face strict penalties of up to 25%, so it is not advisable to do this.
It goes without saying that the loan you receive will be dependant on various factors, including the property’s value, your age, your location, whether you currently have a mortgage that needs to be paid off, your health, and the equity release provider that you decide to go with.
People also choose to manage their money in different ways, so you could receive the income each month to help you with ongoing payments, or you could release the money all at once to pay for something more significant.
The rate of interest will vary depending on the scheme you select and the provider you are lending from, so this is something to consider before you make a commitment. However, the good news is that the cash is tax-free so you could receive a very healthy amount.
Again, there is not one answer for this, as it depends on the various factors stated above. However, as a general rule, you could receive between 20-60% of your home’s value as a cash lump sum or in monthly payments when you use equity release.
You must keep in mind that equity release can affect your entitlement to means-tested benefits, but this is something we can discuss with you if it is applicable.
The Equity Release Council, or the ERC, is an organisation that deals with the fine print of equity release to ensure borrowers know what they are getting into when they seek equity release advice. If you stumble upon any problems when you are releasing equity from your home, the ERC can step in to ensure the process is fair.
This occurs when you have to pay back more than you owed to begin with. This can occur if the financial situation changes dramatically i.e. if your home drops in value by a significant amount.
Fortunately, equity release providers take this into account, so they tend to provide a no negative equity guarantee. This means you will never have to repay more than you borrowed, which is reassuring in terms of your current financial needs, as well as the inheritance that you may decide to leave to your loved ones.
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Use our Equity Release Calculator to find out how much cash you can release
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