The Benefits of an Equity Release Mortgage
An equity release mortgage is a type of loan that allows you to borrow money against the value of your home. The loan is not repaid until you die or move into long-term care, and you can choose to receive the money as a lump sum or in regular payments.
Here are some of the benefits of taking out an equity release mortgage:
There are many benefits to taking out an equity release mortgage. Some of the most common benefits include:
- You can access tax-free cash
The money you release from your home is tax-free, so you can use it for whatever you want. This could be to pay for home improvements, clear debts, or boost your retirement income.
- You can stay in your home
Unlike downsizing, you don’t have to move out of your home when you take out an equity release mortgage. You can continue to live in your home for as long as you want to.
- You can release up to 60% of your home’s value
The amount of money you can release will depend on the value of your home and your age. However, you can typically release up to 60% of your home’s value.
- You can choose a fixed or variable interest rate
Some lenders offer fixed interest rates, while others offer variable interest rates. A fixed interest rate will protect you from rising interest rates, while a variable interest rate could be lower in the short term.
- You have the right to independent legal advice
Before you take out an equity release mortgage, you will have the right to independent legal advice. This will help you to understand the terms and conditions of the loan and make sure that it is right for you.
What are the eligibility requirements for an equity release mortgage?
To be eligible for an equity release mortgage, you must be:
- A homeowner in the UK
- Aged 55 or over
- Have a minimum of £15,000 of equity in your home
- Be able to afford the repayments if you choose a payment plan
If you are considering taking out an equity release mortgage, it is important to compare different lenders and products to find the best deal for you. You should also seek independent legal advice to make sure that you understand the terms and conditions of the loan.
In addition to the benefits listed above, equity release can also help you to:
- Reduce your monthly outgoings
If you use your equity release to clear debts, you could save money on interest payments each month.
- Improve your quality of life
The money you release from your home could be used to fund a lifestyle upgrade, such as a new car or a holiday.
- Leave a larger inheritance for your loved ones
By releasing equity from your home, you could reduce the amount of debt that your loved ones will inherit when you die.
Overall, equity release can be a valuable financial tool for homeowners who are looking to access tax-free cash without having to move out of their homes.
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About Us
Mark began his career at Investec Bank UK where he worked as an Internal Auditor, specialising in auditing structured finance and trading desks across the Capital Markets, Private Banking and Asset Management divisions. From there he moved into broking where he focused on mortgages, protection and health insurance. Mark also previously worked at Barclays Wealth on their Real Estate Finance desk where he specialised in structuring bespoke lending solutions for High Net Worth clients concentrating mainly in the Middle East and Far east regions.
Mark holds a BA (Hons) degree together with the CeMAP (Mortgage Advice), CeRER (Equity Release Advice), Certificate in Financial Planning (CFP), and Certificate in Investments qualifications.
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