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Equity release mortgages

Release tax-free cash from your home

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If you are a homeowner over the age of 55, you can use an equity release mortgage to unlock tax-free cash from your home to support your retirement.

Interest only lifetime mortgages allow the homeowner to make monthly interest only repayments. This helps to protect future inheritances as the interest does not compound over time.

Many providers offer a guarantee to ensure the loan value never exceeds the value of the estate.

How to release equity from your house

If you are over 55, equity release is one method to release the wealth you have tied up in your home. Another option is to sell your home and downsize to a less expensive property.

If you would like to release equity in your home, you can take out a loan or sell some of the value of your home using an equity release mortgage product. The loan, or value, is paid back by selling the property once you have either died or moved to a care facility.

You can release equity if you are aged over 55, own your property outright, or have a small mortgage outstanding on the property.

VA Mortgages can advise on the best equity release solution for your personal circumstances.

How to release equity from your house

If you are over 55, equity release is one method to release the wealth you have tied up in your home. Another option is to sell your home and downsize to a less expensive property.

If you would like to release equity in your home, you can take out a loan or sell some of the value of your home using an equity release mortgage product. The loan, or value, is paid back by selling the property once you have either died or moved to a care facility.

You can release equity if you are aged over 55, own your property outright, or have a small mortgage outstanding on the property.

VA Mortgages can advise on the best equity release solution for your personal circumstances.

What is a lifetime mortgage?

A lifetime mortgage allows you to borrow money secured against your home, which does not need to be repaid until you die or go into long term care. The amount you can borrow depends on your age and the value of your property.

Your home still belongs to you, and you have the option to ringfence some of your property’s value as inheritance for your family.

A lifetime mortgage is different to a normal mortgage as you do not have to make monthly payments. The loan is usually repaid by the sale of your estate, with any remaining value being available for your family.

You can choose to add the interest to the loan or repay it. Many providers offer a guarantee to ensure the loan value never exceeds the value of the estate.

What types of lifetime mortgage are available?

There are two main types of lifetime mortgage:

  1. Interest roll up mortgage
    You can opt for a lump sum or a regular payment, and the interest charged is added to the loan. The full amount you borrowed plus the interest is repaid at the end of the mortgage when your estate is sold.
  2. Interest paying mortgage
    You can opt for a lump sum at the start or a lower loan amount with the option to drawdown further amounts in the future. You will make interest payments, which reduces or stops the impact of compounding interest. The full amount you borrowed is repaid at the end of the mortgage when your estate is sold.

Choosing a lower lump sum on an interest paying mortgage with the choice to drawdown further regular, or occasional, small amounts allows you to only pay interest on the money you need today.

This can be a beneficial route, to avoid paying interest on a large lump sum that you do not need immediately.

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