Are there any alternatives?
There are a few alternatives if you make the decision that the advantages of equity release do not compensate for the downsides. Other ways of generating wealth for your retirement include downsizing, renting out a room, and asking your family for support.
Before you make any decision, it is crucial to seek advice from an adviser. They can help you properly understand your options, and the benefits and pitfalls of each (including their hidden costs and risks). Advisers can also help explain some of the equity release myths.
As well as speaking with equity release advisers, you should seek independent financial advice. The benefits of independent advice are vast. In particular, experts can give advice based on your personal circumstances and finances. They can explain the impact that each scheme or plan will have on your retirement experience, and give you tips to help you combat the risks and pitfalls.
How much can you borrow from equity release?
Lenders allow you to borrow a percentage of the value of your house/estate. Typically, the deal will be in the range of 20-50% of the value of your estate.
The exact deal you receive is determined by considering your situation as a whole. Lenders consider your age, health, and other circumstances when deciding on the details of your plan.
Typically, the older you are, the more you can borrow. However, you must remember to deduct the cost of fees, such as arrangement fees and valuation fees, from the maximum amount you are quoted.
You should also be sure to consider the different interest rates in the equity release market. Typically interest on an equity release loan is higher than for a standard mortgage. Rates generally range from 3 to 5%, so we recommend speaking with advisers to guarantee you choose the best type of loan for your circumstances.
Another thing to think about is whether you wish to receive regular payments or a one-off lump sum. Speak to an adviser, who will consider your personal condition and help you make the right choice.
Use this equity release calculator below to see how much money you could be entitled to. It is free to use, and only takes about 30 seconds to do!