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Equity Release Schemes

A traditional Equity Release scheme means that you take out an interest only mortgage on your property in return for either a lump sum or a regular income.

With these types of scheme the interest "rolls-up" and is repayable, together with the original capital released, on death, sale of the property or when the remaining partner (if a joint mortgage) goes into permanent residential care.

Income or Lump Sum?

If you take a lump sum it is yours to do with as you wish, but the rate of interest that you may be charged for it is most likely higher than you will get by putting it on deposit.

Some schemes allow you to take periodic capital drawdown or monthly income payments. If income is your priority then these are very attractive options as it means that only the amount drawn down is added to the debt as it is taken.

Plus points

• No repayments of interest while you are alive, so you will get a higher income for the same sized loan than with an interest only mortgage or home income plan.

• Most loans are fixed-interest, so reducing risk.

• Plans are available to people as young as 55.

• The provider of a lifetime mortgage will be authorised and regulated by the Financial Services Authority.

Minus points

• The uncertainty about how much will have to be repaid at the end – and how much will be left for your family.

• Interest payments can mount up quickly and will further reduce what your family will inherit. Your family could end up with nothing from the sale proceeds even though the lump sum you were lent only seemed a fairly small proportion of the home’s value.

• You may not be able to get a top-up loan later.

Our standard fee for researching and implementing a scheme is £500. This is payable half at application and half on completion.

We will receive and retain a procuration fee from the product provider as well.
 

Equity Release Help is a trading style of Asset Investment Management Ltd, Drayton Old Lodge, Drayton, Norwich, Norfolk, NR8 6AN
Independent Financial Advisers

Tel 01603 869988

Authorised and Regulated by the Financial Services Authority No 462797. Registered in England and Wales
company registration number 5880144.

Tax advice is not regulated by the Financial Services Authority

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