Equity release -v- extend the mortgage

Barnaby

Hello can anybody shed some light on this for me.

My mortgage is about to end in 2015.
I'm aged 67 while my wife is in her late 50's.
Mortgage is endownment guaranteed to meet the full amount mortgaged of 39k.
Property now valued at 200k so there seems to be quite a lot of equity in the property.

Wanting to use some of that equity now what's the best way of gaining access to it.
Taking an equity plan seems very excessive on the interest payment. Should I approach my bank [Barclays] to ask for a secured loan and if so are they likely to be sympathetic?

After all I can't take it with me.............

Thank you

Malky

Sell up and downsize?

Barnaby

Thanks Malky I know we can do that but we like it here very much and were wondering which other way I could release some equity from the property?
If I understand it correctly I can apply for a secured loan at about 6-7% paying a monthly plan which in total would be cheaper in the long run than taking equity.
The secured loan would be pay-as-you-go while the equity is pay-nothing until the property is sold then pay in full plus the huge interest gained.

Just a thought why is the interest in equity so HIGH ie take 20K over 15 years and you will pay back nearly 50K. This seems very extortionate on what is a secured guaranteed safe for the lender loan.
Any one from the trade care to explain this.

Many thanks

geoffky

The only moneysaving way is to downsize..otherwise do not go near the equity withdrawal route as you can see if your wife lives to a good age then the final payment will be eye watering..The days of treating your house as a cash machine are over and rightly so..people are now paying for the cars and holidays they bought and paying for over 25 years..:rotfl::rotfl:

Barnaby

THANKS GENTS
I'll stay away from the equity loan and have a word with my bank to see if they have any suitable options for low rate loans.

Regards