equity release

Lochead

Hi,

76 year old single male with £99,000 interest only mortgage due for repayment in 6 years time. Current monthly interest payment of £70!!

Do not see the need to pay off mortgage now with such low current monthly interest rate. Is there any reason that anyone can see that I should not be able to take out Equity Release nearer the repayment date as my house is currently worth c. £250,000 and more by that date.

Thanks for any input. Graham

MWT

Mostly it will depend on the type/location/condition of your property.

If it is traditional construction, not an ex-council house, in a good state of repair inside and out, and in a location that is not adjacent to commercial property or any other adjacencies that would be considered as negative, than you have a good chance that it will be possible.

Nobody can be certain what the market and lending conditions will be in 6 years time though so there is always a risk of something changing.

Avoid doing anything to impair the value, like spray-foam roof insulation, for example, and check again every couple of years.

Lochead

Thanks...very good location and meets all the other criteria mentioned.

MoneyGeoff

Equity Release works best for homeowners without a mortgage and with no dependents. You can release a maximum of about 50% of the property value and if you have a mortgage you have to pay that off with the released funds. So if you release £125K you'd pay off the mortgage and be left with £26K and a debt of £125K at about 6%. 

You wouldn't have to pay off the debt until you die but if you don't pay off the interest then their will be very little left of the house in the end. It seems like you'd be swapping a very cheap loan for an expensive one. Do you have children? Have you looked into RIO mortgages?