Equity Release

It is important to consider that equity release will potentially increase how much money you have available to you or your monthly income, and while this is undoubtedly the objective for most people, these figures may be considered and could affect your ability to continue to claim any benefits.

Additionally, it is important to understand that equity release will affect the value of your estate and likely reduce the inheritance you are able to leave to your dependents.

As with any type of finance, it is important to seek professional advice – as an independent mortgage broker with access to whole of market, New Mortgage Finance can advise on the best possible solution to suit your individual needs.

Equity release mortgages are available to any homeowner, over the age of 55. Even if you still have an amount outstanding on your current mortgage, you may still be eligible for an equity release mortgage. 

Lump sum Lifetime Mortgage

With funds released in a single payment, the homeowner can opt to defer interest and repayments until after their death, or to start to make repayments immediately – this means the estate will pay less in the long-term and by opting to make repayments from the outset, more of the value of the property will be left for beneficiaries.

Drawdown Lifetime Mortgage

The homeowner can borrow from the total available in stages, as and when they choose, providing a handy ‘nest egg’ that can be accessed when needed. This flexibility has the added advantage that it will reduce the interest charged in the long term as you will only pay interest on the funds that have been drawn down.

Voluntary Repayment Lifetime Mortgage

Although still a form of equity release, this product enables the homeowner to repay up to 15 percent of the amount borrowed throughout the year with no fixed, regular payment. Leaving more value in the estate, this product is useful for those who have an irregular income, say with dividends or investments making ad hoc payments.

Interest-Only Lifetime Mortgage

As the name suggests, these products mean the homeowner only pays the interest on the equity released and when the property is finally sold, the original amount borrowed is repaid.

Income for a Lifetime Mortgage

With these products, the homeowner receives a monthly ‘income’ from the equity release, rather than a lump sum, creating a staggered source of funds to help with living costs.