M'gage soon paid off. Equity release?

buel

Hi all,
A little bit of advice if that's ok. My parents will have paid their mortgage off by the end of this year and at some point will want to release some equity from their house. They have three sons and we all agree that they should have something to spend after 35 long years of paying a mortgage. Obviously they will take professional advice on the various options available to them but just to give them an idea of what sum they can 'lend', is there a ball park figure as a percentage of the house's worth that they can expect? I thought I read 40%?

_Andy_

Why pay the mortgage off then take secured borrowing again?
I don't follow the logic.

seriousDFW

What do they want to do with the money?

jellie

They'll have the money that they used to pay the mortgage with each month.

BitterAndTwisted

Equity-release is a mug's game. They should consider all other avenues before embarking on this one, like maybe downsizing or selling up and moving to a cheaper area

Annisele

I'm similarly puzzled about why they want to do this.

For ballpark figures, you could try http://www.aviva.co.uk/equity-release/equity-release-eligibility-calculator.html. I'm absolutely not recommending Aviva, it's just a place to get ballpark figures from - and to see that your parents' age makes a huge difference.

buel

Thanks all.
Jellie, I do wonder why people post replies like yours. What on earth is the point? You dont think they realise this?

As for other replies, they own (or nearly own) a cottage in the country, they wont downsize or move.
They want/would like the money as they only have the state pension and would like to enjoy their lives a little by living comfortably. Maybe a holiday or two.

I appreciate the comments. However, no one has yet answered my question about the percentage?

Annisele

40% is on the high side, unless they're quite old.

The calculator I linked gives around 20% if they're 55, up to around 55% if they're 100. 40% comes in around 75ish (depending on property value).

vuvuzela

buel wrote: »

Hi all,
A little bit of advice if that's ok. My parents will have paid their mortgage off by the end of this year and at some point will want to release some equity from their house. They have three sons and we all agree that they should have something to spend after 35 long years of paying a mortgage. Obviously they will take professional advice on the various options available to them but just to give them an idea of what sum they can 'lend', is there a ball park figure as a percentage of the house's worth that they can expect? I thought I read 40%?

Depends on their age, as said - they really need to try and find independent advice about this. And they will be looking to 'borrow', not 'lend' money.

RAS

Much better idea might be to work out how they could increase their income in other ways. Rent the cottage out? Earn money as house/pet sitters? Or couriers?

R_P_W

buel wrote: »

Thanks all.
Jellie, I do wonder why people post replies like yours. What on earth is the point? You dont think they realise this?

As for other replies, they own (or nearly own) a cottage in the country, they wont downsize or move.
They want/would like the money as they only have the state pension and would like to enjoy their lives a little by living comfortably. Maybe a holiday or two.

I appreciate the comments. However, no one has yet answered my question about the percentage?

Well after 35 long years they will have a home they own outright.

Sorry but if you want a comfortable retirement with a holiday or two a year - state pension isn't going to cut it I'm afraid.

Surely any equity release just puts their home at risk? At the moment they cannot be kicked out off their home......every time I hear about equity release it is someone getting royally screwed over!