Aviva Equity release / Lifetime mortgage

MWT

Chime said:

Thanks to everyone who responded on here. To the person who thought I'm only asking because of what inheritance I would miss out on , its not the case. My father has passed and my mum has gone into nursing care. The house has to sold to pay back equity release. Half of the proceeds will have to pay for mums care. Please don't assume!

The only way to look at this is that whatever was going on in their lives in 2001 they decided they needed £46,000 and they elected to get that as a lifetime mortgage and did not take any option open to them to repay any part of that amount over the subsequent years.

They will have been aware of the impact of those decisions, but may perhaps have been comforted by the rate at which the value of their property was also increasing, especially if the current amount owed after all those years is still only half the value of the property...

It is always going to be upsetting to discover this sort of thing which is why I would always advise those considering equity release to tell their close family about it so there are no surprised for anyone.

The interest rate is usually fixed for the life of the product and the rate in this case is in line with the date it was taken out, so nothing manifestly wrong in the numbers you have shared.

ACG

The problem is that it is not just interest.
With no repayments each month the interest gets added to the balance and then interest charged on the new balance and so on. 

It was taken out when interest rates were higher than they currently are so the rate would seem higher because of where the new normal is. £238,000 increase seems high, but when you look at it, it is alittle over £800 a month. Still high on £46k but only by current standards and it would not have taken long to hit £100k and £150k etc.