Equity Release Products ExplainedApollo Pension & Investment Advisers | Medway, Kent
Equity release can be arranged in a number of ways and include various features to suit your needs and requirements for both now and in the future.
A drawdown lifetime mortgage will allow you to release an Initial Lump-Sum to cover any requirements you may have now, but also provide you with the flexibility to take further withdrawals from a pre agreed cash reserve facility in the future.
Initial Lump-Sum Mortgage
Initial Lump-Sum Lifetime Mortgages allow you to release a slightly higher amount as no reserve facility for future withdrawals is included. While drawdown lifetime mortgages might offer more flexibility, some clients prefer to maximize the initial amount they release if they have specific use for the money straightaway.
How much can I borrow?
The maximum you can borrow depends on your age and the value of your home. Many lenders will also factor in any current or ongoing medical conditions as this may result in the potential to borrow a greater amount.
As a guide and subject to the chosen provider you could release up to 20% of your property value. This could however increase up to a maximum of 55% subject to your age at application.
How is the interest calculated?
Lifetime mortgages charge interest on the amount you release but with the added flexibility of not having to make any monthly payments on the amount released unless you are able to, until you die or move into long-term care. As you usually make no repayments during the lifetime of the loan, the interest is accumulated each year the plan is in force. This type of interest is known as compound interest.
The Equity Release Council
The providers that we use are members of the Equity Release Council, The Equity Release Council ensures that equity release is safe and accessible. It incorporates the Safe Home Income Plans (SHIP) standards, which aims to protect you though their code of conduct. The Code of Conduct puts in place safeguards for customers to give them confidence in Equity Release Council members and their products and services.