An Equity Release Mortgage can offer all sorts of freedoms, like unlocking the money tied up in your home and the lifestyle benefits for you and your loved ones. But it’s not all good news. Equity Release can stack up a lot of interest and put unfair pressure on your children.
What is a Lifetime Mortgage?
A Lifetime Mortgage is available for owner occupied residential properties. Like a traditional mortgage, it’s secured against your home and lets you release a certain amount of its value. The rates of interest are very appealing and you’ll still reap the rewards if your home’s value increases.
The SBS Lifetime Mortgage
The SBS mortgage is set up on Interest Only, meaning there’s no repayment vehicle needed and your capital balance will stay the same. You can release up to 35% of your home’s value or purchase price, depending on which is lower – this could be anything from £30,000 to £300,000. There’s also the option to pay an extra 10% back each year without penalty. You’ll need to be at least 65 to apply, though there’s no maximum age.
Is it for you?
Like any loan, a Lifetime Mortgage application will depend on your own circumstances. The amount SBS offer you will be based on your income – which can include your pension. They’ll also account for any other financial commitments you have.
If your home is in joint occupancy, you’ll both need to enter into the mortgage and fit into the age and income brackets. And in a joint application, the last survivor will need to be able to demonstrate serviceability.
More benefits
Scottish Building Society will put £150 towards your solicitors’ fees during your remortgage. They’ll also pay for a suitable property valuation, which is a required part of your application.
Things to remember
Any equity release product will reduce the amount you leave your loved ones. And while this is obviously your decision, we recommend talking to a professional advisor before entering into a new mortgage.