Releasing equity from property to pay existing mortgage ?

jjamestyu

I’ve recently purchased a property for £200k with an 80% mortgage.

Im in my 30s

The property is actually worth £300k (based on near identical properties recently sold nearby).

I like the property and don’t want to sell it, is there some sort of financial product out there that will allow me “sell the £100k uplift” for cash which I can then use to pay off a large chunk of the mortgage. I use inverted commas as I don’t actually want to sell but rather release £100k equity, the cash from this will be used to pay down the mortgage and the lender of the equity release product will get their funds back say in 10 years when I sell the property.

i use the words “sell” and “equity release” lightly as I don’t think these are the correct terms for what I’m looking for but the best I could conjure from my vocabulary.

Salemicus

There's nothing that would make financial sense, no. The interest rates on equity-release style products are far higher than typical mortgage rates. If you think about it, you're imagining that someone will buy 1/3 of your house, but you will still get 100% of the value of living in it, and 100% of the decision of when to sell. It doesn't make sense for the investor, except at extortionate rates.

What you could do, at an appropriate point, is remortgage with the new valuation. Assuming that the valuer agreed with you that the property was worth £300k, your LTV would be ~53%, and you'd be able to get a better interest rate.

Thrugelmir

How has the discount arisen?