Equity Release Mortgages
Our Equity Release Mortgage Service
Fair Mortgages can help you find a borrowing solution if you are aged 55 or older.
Options we can help you with cover:
- Retirement interest only mortgages
- Equity release plans
Depending on your circumstances we can help find you a solution suitable for your needs.
Special features of what we offer include:
- Whole of market service
- Access to leading market rates
- Access to exclusive equity release mortgage deals not available on high street
- Fast turnaround - call us if you need to move fast!
To investigate your equity release mortgage options regarding raising additional finance call our specialist team on 0117 403 4474 or fill in our call back form.
What is Equity Release?
Equity release, also known as lifetime mortgages, allow you to take cash from the equity that has accumulated on your property over the years. Click here for the latest equity release schemes
A lifetime mortgage enables you to release money tied up in your home by providing a loan secured against the value of your property. This loan does not need to be repaid until you die or go into long term residential care. The main principle of a lifetime mortgage is that it allows you to stay in your current home while releasing tax-free cash, which you can then use as you wish.
Click here to use our Equity Release Calculator »
When you apply for a lifetime mortgage the mortgage provider will calculate the amount of money that you can release. This will be based on factors such as your age, your life expectancy, and the value and type of property you own. Any other outstanding mortgages or debts will also be taken into account.
Eligibility for equity release mortgages
If you want to apply for a lifetime mortgage you will need to meet several criteria, such as:
Minimum age – the lower age limit for taking out an equity release mortgage is usually 55 or 60. The percentage of your property that you can borrow as a tax-free lump sum depends on your age when you take out the lifetime mortgage. Generally speaking, the older you are, the more you can borrow - in some cases up to half the value of your home.
Property type and value - Not all properties are eligible for lifetime mortgages. You may not be able to get an equity release mortgage on a flat or maisonette, and your property will usually need to meet a minimum value in order for your application to be considered.
Advantages of equity release mortgages
- A lifetime mortgage could allow you to retain ownership of your home - this means that you can still benefit from any house price increases.
- Lifetime mortgages can offer flexibility – depending on the provider, you may be able to choose from a lump sum payment or regular income payments.
- There are normally no repayments to be made until you die or until you move into a care facility.
- An equity release mortgage could offer a solution for people who do not want to downsize or who do not want move out of their current home for other reasons.
- With lifetime mortgages you can still benefit from any further rises in the value of your property.
- Many lifetime mortgage deals offer a fixed rate of interest.
- Reputable providers offer a no negative equity guarantee which means you will never owe more than your property's value.
Disadvantages of equity release mortgages
- With a conventional mortgage, interest is charged on a decreasing amount (i.e. as you pay off the mortgage, the sum owed and thus the interest goes down). Because no repayments are made on a lifetime mortgage during the term of the loan, interest compounds rapidly. If there is not enough money left from the sale of the property to pay off the loan, your beneficiaries would have to repay any extra. Therefore, it’s important to make sure that your lifetime mortgage offers a no negative equity guarantee, which ensures that you will never have to pay back more than the value of your home.
- The interest charged on your cash lump sum is added to your outstanding debt, which can, over time, affect the proportion of your home that you own outright.
- Lifetime mortgages are designed to be held for the long term, so if you choose to repay the loan early you may incur repayment charges.
- The interest rate on a lifetime mortgage is usually higher than that of a conventional mortgage.
- Just like a regular mortgage, the process of applying for an equity release mortgage can involve various fees such as valuation and legal costs.
- Taking out a lifetime mortgage could affect any means-tested benefits that you are eligible to receive.
To find the best equity release mortgage deals, complete our equity release enquiry form.
Lifetime mortgages as from October 2004 are regulated by the Financial Services Authority. A lifetime mortgage is a loan secured on your home. The loan and interest are normally repaid from the proceeds of the sale of your home when you die or move into long term care. With a home reversion plan you sell all or part of your home for cash. However you do not get the full market return for doing so.
What is a retirement interest only mortgage?
A retirement interest only mortgage (RIO) is a mortgage that lets you pay the interest on a monthly basis, without reducing the original amount (capital) you have borrowed. It is only available to people who are both over the age of 55 and in retirement.
The main difference with a RIO compared to a traditional equity release plan is that the mortgage is based on you ability to pay the monthly interest repayments so your income comes into play in assessing affordability. With equity release your income does not come into play.
Interest-only mortgages for older consumers are available for older borrowers (typically 55+) and need only be paid off when, for instance, the person dies or he/she moves into residential care. In this sense then it’s actually another form of equity release (although a far less expensive version in the long term and one that means you will still have security ‘equity’ in your property).
The above equity release mortgage detail is for information purposes only as does not constitute financial advice under the Financial Services and Markets Act 2000. When considering any type of equity release product, it is important that you seek independent legal advice.