Don't be burdened with confusing remortgage deals

Equity release is the process of letting homeowners aged 55 and over release tax-free cash from their homes. The amount available will depend on the home’s worth and your age.   The most common form of equity release is called a ‘Lifetime Mortgage.’

With a Lifetime Mortgage – you will continue to own your property and have the right to live there for life (or upon movement into long term care.)

There is an older form of equity release called a ‘Home Reversion Plan’ which can require the applicant to sell ownership of their property to the lender.  These plans represent around 2% of plans in the industry and historically have given the sector a bad name. Any advisor we recommend to you will be a trained expert, supported by compliance departments ensuring an excellent quality of advice. They are highly unlikely to recommend this solution to you as it is only suitable in very limited circumstances.

Any firm that is advising or selling equity release products must be regulated by the Financial Conduct Authority (FCA). This protects clients and provides them access to the financial service compensation scheme should they ever need it.    When looking for equity release advice, it’s recommended that you seek advice from a qualified advisor who is registered with the Equity Release Council.

Equity release is a complex area and the Financial Conduct Authority have stipulated that people must get independent advice. Equity Release isn’t right for everybody and there may be better solutions out there that customers are not aware of. Advisors will review other options alongside equity release to consider which is most appropriate.

Lenders cannot ‘sell’ plans to you directly – although can introduce you to ‘tied agents.’ We recommend you speak to an advisor with access to the Whole of Market, so that they can consider plans from a broad range of providers.

Equity release funds typically come from pension providers, some of which you’ll have heard of, like Aviva and Legal and General, and other’s that you probably won’t know. Expert advisors will use industry leading sourcing tools to review the most suitable products for you from the whole of market.

In short, the older you are, the more you can borrow as a percentage of the value of your home. The product rates themselves are Fixed for life on the initial lump sum. Product rates are more closely linked with government backed 15 Year GILT rates than they are the Bank of England base rate. Speak to an advisor to find out why.

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Loan amounts will vary depending on your age, health and value of your property. Lenders calculate the maximum loan compared to the value of your property and express this as a percentage, referred to as Loan to Value (LTV.) They will often lend slightly less on flats.

In general, the older you are, the more you can borrow as a percentage of the value of your property (the higher the LTV.)

If you have any adverse health conditions, eg High Blood Pressure, Type 2 diabetes or more serious conditions like a history of heart problems or cancer, this may increase the loan amount available to you with some lenders.

Lenders have been known to change the Maximum Loan to value (LTV) quite frequently. Our tool is updated regularly, however for an accurate indication of the maximum loan available to you it’s best to speak to a qualified advisor, who can often give you an initial indication of live LTVs and rates over the phone within a few minutes. They will apply caveat’s around this, but atleast you’ll be better informed than just putting some figures in an online calculator!

1. Property or Construction Type

Properties of non-standard construction are often hard to secure a loan on. Some flats and listed buildings may also be more difficult to borrow against as can be properties with more than one kitchen, or a second dwelling on the grounds with separate utility bills. Some lenders are more flexible than others though, so just because one has said no, it doesn’t mean all the others will.

2. Location

Properties adjacent or opposite to commercial buildings may not be acceptable. Those in high flood risk zones or close to a railway line may also be more difficult to borrow against.

3. Spray Foam insulation

Properties with spray foam insulation in the loft can be undesirable to lend money on. There are at times lenders willing and able to lend on a property with spray foam, although it may depend on the type of spray foam insulation used. These products may also be at higher rates. For more information speak with an advisor

4. Clutter

A lender’s surveyor needs to be able to visit the property and access each room. If a room is full of clutter it may prevent a valid valuation survey.

Maybe. If you already have a Lifetime Mortgage and are unhappy with the product rate, or want to borrow additional funds beyond your current facility, it may be possible to re-finance you existing equity release mortgage. However, with some plans, Early Repayment Charges may be payable.

For some people it may make sense to pay an Early Repayment Charge and refinance, whilst for others it won’t.

An expert advisor will help you understand what’s possible in your situation and provide the most appropriate advice for you.

Most plans will allow you to port or transfer the lifetime mortgage to a new property (if suitable.) Some will have some form of ‘downsizing protection’ built in. The level of flexibility between different providers and their plans can vary significantly and by talking through your preferences with an advisor, they can help recommend the most appropriate plan for you.