Equity Release guide discussion

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  • I have noone to leave my estate to so surely the equity release is a win win for me?
  • missile
    missile Posts: 11,684 Forumite
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    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
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  • tonywick
    tonywick Posts: 12 Forumite
    First Anniversary Combo Breaker
    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.
  • ashpan
    ashpan Posts: 335 Forumite
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    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
  • Downsizer
    Downsizer Posts: 16 Forumite
    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!
  • 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?
  • tacpot12
    tacpot12 Posts: 7,929 Forumite
    First Anniversary Name Dropper First Post
    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 try to check official information sources before relying on my posts.
  • Mnd
    Mnd Posts: 1,699 Forumite
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    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
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