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Equity Release guide discussion

edited 30 November -1 at 1:00AM in Over 50s Money Saving
147 replies 60.7K views


  • I have noone to leave my estate to so surely the equity release is a win win for me?
  • missilemissile Forumite
    10.8K posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    In my opinion, anyone who takes out an Equity Release mortgage without paying the interest each year is a mug because, as you suggest, you end up paying interest on interest on interest.

    However, interest rates aren't massively higher than for conventional mortgages. My wife and I are in our 70s, and we're in the process of buying a house in the UK having lived abroad since 2004, so getting a conventional mortgage is all-but impossible for us.
    Accordingly, we've taken an Equity Release mortgage to help fund the purchase, at an interest rate of 3.83%, which on the £90K we are borrowing works out at £3600 a year. The rate is fixed for the life of the mortgage, and we intend to pay off the interest and part of the capital each year - we can pay up to £9000 without penalty.

    I suspect that interest rates will increase, possibly substantially after Brexit hits home, but we will still be paying 3.83%.

    Sounds like a good deal. Who was your provider and was there an arrangement fee?
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • tonywicktonywick Forumite
    12 posts
    Even if you don't have relatives to leave your estate to, might be worth considering that the quality of a nursing home (if you need one) could be improved by the amount of funding you have available at that time.
  • ashpanashpan Forumite
    204 posts
    Fourth Anniversary 100 Posts Combo Breaker
    I am considering equity release with the option of paying back as high a % as possible each year to reduce the amount i owe. Are there any options where i can pay the equity back in less than 10 years as im expecting a couple of lump sums in the next few years
  • DownsizerDownsizer Forumite
    16 posts
    To give a indepth insight of the concepts and workings of the Lifetime Mortgage industry go to Forums ,jump to Mortgages & Endowments. Scroll down to Lifetime Mortgage and study closely the opinions
    made for and against getting involved in what can be a very expensive mistake .
  • I understood that the interest rate was only vid for the first ount that was drawn down. Future drawdown would therefore have a potentially different interest rate. I might be wrong. I'm at the early stages of looking into advice on this!
  • Gerry56Gerry56 Forumite
    5 posts
    Second Anniversary First Post
    I've seen all sorts of horror stories here and elsewhere about charges. I know there are now some very good products available. I just wanted to add that the option of downsizing sounds good in principle but don't forget, moving house can also incur some horrendous costs. We recently downsized our property. The estate agents fees, solicitors fees, stamp duty, and moving costs came to just under £14,000. With the interest repayment options available in lifetime mortgages these days, it could take a while to attract £14,000 of charges.
  • im heartbroken I have just found out my parents had equity release on their house around 18 yrs ago borrowed 60K on checking a lastest statement now owe 118K dont know what to do? anyone got advice?
  • tacpot12tacpot12 Forumite
    3.5K posts
    1,000 Posts Fourth Anniversary
    bevjtaylor wrote: »
    im heartbroken I have just found out my parents had equity release on their house around 18 yrs ago borrowed 60K on checking a lastest statement now owe 118K dont know what to do? anyone got advice?

    Can you explain a bit more about why you are heartbroken? Why do you need to do anything?
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always check official information sources before relying on my posts.
  • MndMnd Forumite
    1.7K posts
    1,000 Posts Third Anniversary Name Dropper
    I don't think you need to do anything, as I understand it nothing needs to be paid while there is 1 surviving parter left living in the home.
    The loan only needs to be paid out on the death or going into care of that second person.
    Sorry if my understanding is incorrect
    No.79 save £12k in 2020. Total end May £11610
    Annual target £24000
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