Your home has value tied to it that you can turn into a source of income during retirement. Equity release refers to the process of cashing in on that value in exchange for a lump sum. Most financial institutions provide more than one option for homeowners.
The money acquired after releasing the equity on a property can be used for anything.
Before deciding what lump sum to offer you, lenders will look at various elements such as age, property value and the type of investment (primary residence or holiday home).
Before a property owner can approach a lender to release equity, it helps to know what to expect. A house equity release mortgage calculator is designed for this purpose, as it will give you a good idea of how much cash you could release from your home.
If you have any questions or just need some advice you can call us on 0800 953 3792.
An equity release mortgage calculator is a tool that makes it easy to determine if a homeowner can afford to get a lifetime mortgage or home reversion plan. A majority of UK financial institutions provide customers with equity release scheme calculators. All respectable providers are also members of the equity release council. All the product providers are also authorised and regulated by the financial conduct authority.
The tool is designed for simple use, requiring you to submit some details to determine how much you could release, typically from a lifetime mortgage.
The application comes in handy when considering releasing part of the home equity but are not ready to involve an expert.
You get an estimate as to the lump sum you could release to guide your decisions.
When picking an equity release mortgage calculator, ensure that it is the right type. Some tools are built specifically for home reversion schemes, while others are for lifetime mortgages. Note that the figure you get from the calculator is an estimate. Therefore, it may not be the exact amount that a bank arrives at.
If you have any questions or just need some advice you can call us on 0800 953 3792.
If you are thinking about using equity release, here is a short video that shows you the pros and cons of equity release.
You can see the original version on youtube here.
Just because the option for equity release is there, it doesn’t always mean that it’s right for you.
A number of individuals can end up in a worse monetary situation by choosing an unsuitable retirement product. Worse still, a homeowner can leave the family paying for the accrued interest for years.
The question ‘how does equity release work’ is only part of the preparation. A property owner should know about his or her affordability. If you sell a portion of your home to take out a mortgage, can you afford the interests? An equity calculator allows you to answer this.
If it’s a lifetime mortgage, a calculator will tell you how much interest it will generate. Remember that interest rates vary with lenders and the creditworthiness of the borrower.
If it’s a home reversion plan, interest doesn’t apply.
For example, one lender may have a maximum lump sum of 60% of the property value for its lifetime mortgage. Another may insist that an applicant for home reversion be at least 65 years old.
By using different calculators, you can see what various lenders are willing to offer relative to your property value.
Here is a useful video about how an equity release scheme calculator works.
To help our site users you can contact us and have a free consultation with an equity release specialist to help you better understand how it works and what your options might be. They may then be able to provide you with any advice that may be needed.
To do so you can contact us and book an appointment directly using the calendar below. Just pick your preferred time and date and someone will call you to help. You can book a call anytime between Monday and Friday.
Alternatively, you can call us directly on 0800 953 3792.
Any mortgage provider that is discussed will be a member of the equity release council, which means you can take a lot of comfort from that.
Other than figuring out how much money you could release, a calculator can help with the interest. Lifetime mortgages accrue interest over their lifespans.
Any borrower must know what this is before applying. Equity release scheme calculators that are designed for lifetime mortgages often have the option of allowing you to calculate the overall interest.
The debt after releasing equity can compound significantly. Learning how much interest to expect can help a homeowner decide if the loan is a suitable option or if he or she should consider home reversion. Note that the interest rate will determine how much debt builds up.
Consequently, this debt will affect how much is left of your estate to bequeath.
Working out the equity release interest payments is simple. Almost all providers have fixed interest rates for these products. Therefore, you only have to know what applies for one month.
You can use a calculator to compare equity release interest rates from different lenders so that you can pick the most affordable one.
Almost every lender that offers a mortgage will have a free equity release calculator online. A big plus side to these tools is the cost savings when researching and comparing products. You can check how much provider A is willing to give for 40% of your house against provider B.
With an equity release calculator, this comparison doesn’t cost anything but a few minutes.
Part of your due diligence before applying for equity release is knowing if it’s suitable. A free calculator allows you to evaluate that without spending on an advisor. You can invest in expert services after learning if an equity release scheme is a good solution.
A retirement mortgage is almost similar in structure to the conventional product.
You have to pay interest for the duration of the loan. It is why you must know how much this interest will be. A repayment calculator will help you work out the approximate interest.
Lenders attach fixed interest rates to lifetime mortgages. However, some institutions have variable interests. In such instances, providers have to adhere to an ‘interest cap’ to ensure that they don’t cost too much. Whichever the case, an equity release repayment calculator comes in handy.
When you know the repayment expected for a loan, it makes it easier to create an interest repayment plan. Sticking to a repayment schedule will make the loan less expensive and reduce the burden when it is due.
A provider can consider your monthly income to determine if you can make monthly interest rate payment.
Use our equity release interest rates calculator to see what the cost for you could be.
If a bank, credit union or building society offers equity release, a calculator will be available. If not, you can search the web or use the one above. Most applications will not ask for forms or other information except for the value of the home and some basic personal details. You can also find calculators by going through the equity release council. All mortgage providers are also authorised and regulated by the financial conduct authority.
When searching for an equity release calculator online, check that it is the proper one. Remember that home reversion and lifetime mortgage are two different products, so the calculations are different. You want to be certain that the estimates you get are as accurate as possible.
Online calculators are usually easy to use, but you can look at examples to understand the functionality. You can click on the calculator below to try one out.
Releasing equity is a practical solution for many people. The retirement product allows a homeowner to take out tax-free cash, perhaps in the form of a lifetime mortgage, or sell part of their home. After an individual dies or moves into a care facility, the property can be sold to cover the interest.
Using equity release to pay for care costs makes it possible to retain a high quality of life. Equity release is, however, not suitable in every circumstance. A homeowner must be able to afford it and qualify. An equity release calculator can help to tell if the product is the right solution and find out home much tax-free cash you can receive.
A no negative equity guarantee means that you will never owe more than the value of the home. This will help borrowers get comfort in the event of the property value falling below the amount they owed. In addition, for lifetime mortgage or other products to meet the Equity Release Council’s Product Standards, they are required to feature a “no negative equity guarantee”.
Click the button at the bottom of this page to speak to someone and get the financial advice that you need.
Or, you can call us directly on 0800 953 3792.
An equity release calculator will tell you how much money you could receive as a tax-free lump sum. The amount is usually dependant on your age and the value of your house.
Interest rates vary and can be anywhere between 3% and 7%. You can call us on 0800 953 3792 and get information on the latest deals, as they can change every day.
Yes, the money you receive is tax-free. However, if you are in receipt of means-tested benefits then these can be impacted. You can contact us on 0800 953 3792 and see if you would be impacted.
The money from equity release can be used for a variety of things. Typically it is used to pay for long term care, modify your home to help with later life living or even to treat yourself to a holiday of a lifetime and help your family financially.
The most popular type is called a lifetime mortgage. If you are over 65 then a home reversion plan might be a better option, Get in touch with us and we will be able to tell you what we think would be best for you.