Equity release vs getting a mortgage on parents house

outoffunds

Something not mentioned is that equity release could disqualify your parents from some benefits like council tax benefit (or whatever it is now called). My parent's neighbour did this and had to keep realising more equity to pay bills. By the time she died they owned most of the property.

atush

Margaret, you were lucky doing ER before the crash.

With BOE signalling rates going up this year, it would be a deal with the devil IMHO.

A 50K loan from one or both children, with a legal agreement they owned a part of the house or the loan was to be repayed on the sale, would be the best here I feel. No2 being easiest.

How did they plan to pay off the mtg when they took it out?

xylophone

Since your parents are finding the money to pay interest on this loan, they should be in a position to pay their share of a £50,000 repayment mortgage?

A fixed rate ( if obtainable) might give you/parents/sibling some comfort?

It might be worth approaching a mortgage broker or even the current mortgage provider to see what would be possible.

margaretclare

Yes, I think we were lucky. I don't think we'd do it now. I think we - certainly I - were a little bit crazy following my younger daughter's death at the end of 2002. We have never been concerned, since that happened, about leaving it all to someone else. If we cared to we could pay the annual interest and then it wouldn't roll up at all. It would be just like an interest-only mortgage, which was what I had originally.

Proxy

atush wrote: »

Margaret, you were lucky doing ER before the crash.

With BOE signalling rates going up this year, it would be a deal with the devil IMHO.

A 50K loan from one or both children, with a legal agreement they owned a part of the house or the loan was to be repayed on the sale, would be the best here I feel. No2 being easiest.

How did they plan to pay off the mtg when they took it out?

Whilst index linked Equity Release policies did exist ten years ago, they do not now. The rate would be fixed for life and BOE rates in the future are irrelevant.