Blog | South West Equity Release

How is interest calculated on Equity Release?

How is interest calculated on Equity Release? Understanding how the interest is calculated on an Equity Release plan is crucial if you are going to seriously think about taking one out. By far, the most common type of Equity Release plan is a "Lifetime Mortgage", and the amount you will owe on an Equity Release Lifetime Mortgage plan is most commonly calculated by “rolling up” the interest. If you have ever used a savings account you will already be familiar with the principle of “rolling up” interest as it is the way interest is added to your balance to make your savings grow.…

How using Equity Release can help a younger family member get on the housing ladder.

How using Equity Release can help a younger family member get on the housing ladder Saving up for a deposit on a first home is a struggle. A deposit of, at the absolute least, 5% is required, and even then, the choices of mortgage provider are almost non-existent as 95% mortgages are so scarce. Generally speaking, the more deposit you have, the more choice of provider you have, and a 10% deposit opens up the choices a little. A 15% deposit starts to give you many more options regarding the better deals and 20% even more still. But with the…

Can I repay an Equity Release Plan early?

Can I repay an Equity Release plan early? The short answer is yes. However, it might not be the best idea to do so. Here's a few reasons why you need to think carefully before paying off your Equity Release plan early. Equity Release plans are designed to last for your lifetime and as such they are not meant to be repaid early. However, it is generally acknowledged that sometimes this is what the borrower wishes to do and therefore a facility to do so is usually put in the terms and conditions. Penalties Early repayment penalties are the key…

Can I sell my house if I have Equity Release?

Can I sell my house if I have an Equity Release plan? Lifetime mortgages are portable from property to property. But it might not be a straightforward exercise. There may be many reasons for moving home once you have an Equity Release plan. After all, the minimum age to start one is usually 55 and it would be odd to make a decision that commits you to stay in one place for possibly the next 40 years or more. However, moving house when an Equity Release plan is involved brings with it some additional things to think about. The main…

Now is the perfect time to think about switching your existing Equity Release Plan to a new provider

Now is the perfect time to think about switching your existing Equity Release plan to a new provider Switching Equity Release providers is straightforward and could save you and your family thousands of pounds. If you have had your plan for several years, things may well have changed since you first took it out. New products with options that suit you better may now be available, interest rates may well be lower and, as you have got a few years older, you may be able to access further cash from your home . Finding out whether it is a good…

What types of Lifetime Mortgage are available to me?

What types of Lifetime Mortgage are available to me? Lifetime Mortgages Although all Lifetime Mortgages share the same basic features, there are variations that mean that they can be adapted in certain circumstances to fit your needs more precisely. The minimum age is 55 for any applicant, so for a couple age 60 and 54, you must wait for the younger partner's birthday or be within three months of it to start an application All lifetime mortgages are based on the youngest age and the value of the property. At a specific age, you will be able to borrow according…

The first four questions you need to ask

The first four questions you need to ask about Equity Release What are the different types of Equity Release I can have? The most common type of Equity Release Plan is a "Lifetime Mortgage" which, like all forms of mortgage is a loan against the value of the property. Unlike other more conventional mortgages though, the loan does not have to be repaid until the borrower dies or moves into permanent long term residential care. As there are no monthly repayments, the interest is rolled up and added to the original loan amount. Eventually, at the end of the plan,…