The UK’s long history of increasing house prices means that a large proportion of homeowners’ wealth is sunk into their property and is, therefore, inaccessible.
Homeowners who are aged 55 and over are eligible for equity release, allowing them to access the cash tied up in their property to help with their retirement planning without selling up and downsizing.
Equity release is often an attractive proposition for retirees who want one lump sum to supplement their income or make home improvements. Still, it is essential to seek professional advice before making any decisions.
The amount of money that may be taken from a property by releasing equity is determined by several criteria, including the property’s value, the homeowner’s age and the sort of equity release product selected.
According to recent figures, the average percentage released is 18%. This means that for every £100,000 worth of property value, homeowners can expect to release £18,000. However, this figure is likely to vary significantly depending on individual circumstances.
Equity release is a way of getting access to the cash tied up in your property without having to sell your home or take out a traditional loan. The minimum age requirement is 55 years old, and equity release is often used as an alternative retirement income. There are two main types of equity release: lifetime mortgages and home reversion plans.
A lifetime mortgage is the most common form of equity release. Like a regular mortgage, homeowners with a lifetime mortgage borrow against the value of their property over their lifetime, with no payments made each month. When the owner dies or in the event that they enter long-term care, you will have to repay the loan plus pay interest that has accrued on the lifetime mortgage.
A home reversion scheme is less common and involves selling a share of your property to a provider in exchange for an initial lump sum or regular monthly payments. Like a lifetime mortgage, the debt is only repaid when the property is sold.
The maximum amount you can get from an equity release loan will depend on several factors, including the value of your home, your age and the type of product you choose, and if you have an existing mortgage.
In general, the older you are and the higher the value of your home, the more equity you will be able to release. But a number of other factors are also at play when calculating the maximum equity loan amount.
The amount of equity that you can release is generally calculated as a percentage of the property value. The average percentage of equity release is 18%. However, this can vary depending on the age of the homeowner, the type and value of the property and the type of equity release product chosen.
The value of your property is important to equity release lenders. This is because, for most applicants, the sale proceeds of the property will be the means by which they repay the loan in the future.
For example, homeowners aged 55 and over who have a property worth £200,000 could potentially release £36,000 with an equity release product. This is based on the average percentage of equity release of 18%.
You can seek equity release advice or consult an equity release calculator to calculate equity release based on your individual circumstances.
Call Boon Brokers on 0333 567 1607 to discuss your equity release requirements.
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All equity release and mortgage advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
The loan to value (LTV) ratio is the amount of money you borrow from a provider as a percentage of the value of your home. For example, if your property is valued at £200,000 and you borrow £50,000, the LTV would be 25%.
The LTV of equity release products is generally between 40% and 60%, meaning that homeowners can shed a significant amount of money while still retaining a substantial percentage of their house value.
A number of factors can impact the maximum percentage from releasing equity.
These plans can offer a higher loan-to-value (LTV) than standard equity release products. This means that homeowners with medical conditions could potentially release larger sums of money from their property.
The maximum LTV for a medically underwritten equity release plan is typically 50%, although this can vary depending on the age of the owner and the value of their property.
Some companies charge an arrangement fee, which is determined by the loan’s size. These costs are typically tacked on to the total amount of the loan, so keep them in mind when choosing how much equity release you’ll need to secure from your home.
You could find an equity release provider that offers cashback deals, which can give you a lump sum of money when you take out the loan. This money can be applied to any outstanding debts or to make home improvements as needed.
If you are married or member of a civil partnership, you may be able to take out a joint equity release plan with your partner. This could increase the amount of money that you can release from your property, as a joint application will be based on the age and health of the youngest applicant
The maximum LTV and the amount of money you can release are also determined by the sort of property that you own. Properties with a greater value or constructed of brick, for example, are generally more eligible for equity release than flats or buildings constructed of wood.
The location of your property can also greatly affect the amount of money that you can release. For example, properties in London and the South East are generally more valuable than those in other parts of the UK, so homeowners in these areas could potentially release money of a higher percentage from their property.
Remember that any outstanding mortgage you have on your current property also impacts the amount of equity you can release.
The features of the equity release plan can also affect the maximum LTV and the amount of money that you can release. For example, some plans allow you to make partial repayments or to take a break from making repayments, which can increase the amount of money that you can release from your property.
If you have a lodger, this can also affect the amount of money that you can release from your property. This is because your property’s market value will be increased, which could potentially increase the maximum LTV and the amount of money that you can release.
If you own a second property or a buy-to-let property, this can also affect the amount of money that you can release from your property. This is because the value of your home will be increased, which could potentially increase the maximum LTV and the amount of money that you can release.
The lowest amount that you may borrow with an equity release scheme is £10,000. This can differ, however, based on the provider and the kind of plan you select.
The maximum equity you can borrow through equity release is not restricted, since the value of your house and your age define the maximum amount that you may withdraw. However, most equity release providers will only lend up to a certain percentage of the property value (typically between 30% and 50%).
This means that if you have a lot of equity in your property (if, for example, you do not have an outstanding mortgage), you may be able to release a larger amount of money.
There are a few things that you can do to increase the equity release percentage and ensure you are releasing the maximum equity possible:
You can achieve this by making improvements to your property or by moving to a more expensive property.
You can do this by making overpayments on your mortgage or by switching to a cheaper mortgage deal. This will increase how much equity you have to release.
The older you are, the amount equity you will have in your property is likely to increase.
Some equity release plans have a higher maximum LTV than others, which increases how much equity you can release more equity from your property.
Some equity release plans have features that can increase how much cash you can release from your property, such as the ability to make partial repayments or to take a break from making repayments.
If you’ve decided that you want to release equity from your property either through a home reversion plan or a lifetime mortgage, the next step is to compare equity release plans. This will help you to find the best deal for your needs and to make sure that you’re getting the most money possible from your property.
When you’re comparing equity release plans, there are a few things that you need to look out for:
Once you’ve compared equity release plans and found the best deal for your needs, you can apply for the plan. Most equity release providers will require you to get a financial assessment before they approve your application.
If you’re approved for the plan, the money will be paid into your account and you can start using it however you like.
It’s important to remember that lifetime mortgages are a lifetime commitment. This means that you will not be able to sell your property or move house until the loan is repaid in full.
If you’re thinking about taking out an equity release mortgage, make sure to get advice from an independent financial adviser or an equity release adviser to make sure that it’s the right decision for you.
Furthermore, make sure the provider you use belongs to the Equity Release Council and is regulated by the financial conduct authority, so you are protected from pitfalls like negative equity.
The adverts for Boon Brokers on this page have been signed off as a Financial Promotion by Boon Brokers Limited, to ensure that they are in compliance with Section 21 of FSMA. Boon Brokers Limited is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
Equity release is a way of getting access to the cash tied up in your property without having to sell your home or take out a traditional loan. The minimum age requirement is 55 years old, and equity release is often used as an alternative retirement income. There are two main types of equity release: lifetime mortgages and home reversion plans.
The maximum amount you can get from an equity release loan will depend on several factors, including the value of your home, your age and the type of product you choose, and if you have an existing mortgage.
The amount of equity that you can release is generally calculated as a percentage of the property value. The average percentage of equity release is 18%. However, this can vary depending on the age of the homeowner, the type and value of the property and the type of equity release product chosen.
The lowest amount that you may borrow with an equity release scheme is £10,000. This can differ, however, based on the provider and the kind of plan you select.
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Unlike most equity release advisors, Boon Brokers do not charge any fees! Have a free consultation to see how they can help.
You can speak to Boon Brokers on the number below and discuss your options
0333 567 1607
Use the equity release calculator and see how much money you could receive.
You can book a call back from for an equity release specialist, who can call you when it's conveniant
All equity release advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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