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Equity release - anyone done this?

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    Equity release - anyone done this?

    Wife and I have no kids or surviving relatives, so anything left when we die will just go to charity. We've already paid off the mortgage.

    We will have 2 x full state pension (currently £168/week) to live off, so thinking of supplementing this with equity release. Thought about downsizing but we'd rather stay where we are.

    Anyone done equity release? Any tips?

    Thanks in advance.

    #2
    Originally posted by stonehenge View Post
    Wife and I have no kids or surviving relatives, so anything left when we die will just go to charity. We've already paid off the mortgage.

    We will have 2 x full state pension (currently £168/week) to live off, so thinking of supplementing this with equity release. Thought about downsizing but we'd rather stay where we are.

    Anyone done equity release? Any tips?

    Thanks in advance.
    my wife and I are about 15 / 20 years away from being able to make use of it, but had had a look at it for planning for our future. It's certainly something we are considering. The only thing I don't like about the standard product is because you aren't paying off the interest, the amount you owe grows really quickly (obviously depending on the interest rate). But if you do want to downsize in the future, you might not have enough equity left in your property.

    The products we found most interesting were the drawdown products where you only pay interest on the money you've taken and can take it out as and when you need (up to what ever the limit is) or the interest only lifetime mortgages. We figure we will probably stay in the house we have when we retire but will probably need to downsize at some point. So will look at taking an interest only mortgage for the difference in our house and the one we want to downsize to, and take that up to that amount and just pay the interest. We can hopefully invest some of the released money in dividend paying shares / funds in an ISA, to pay off some / all of the interest and have some capital left over.

    We are hoping that the products have matured a bit by the time we come to using them though, so there might be more / better choice & options.

    Comment


      #3
      Originally posted by doconline View Post
      The products we found most interesting were the drawdown products where you only pay interest on the money you've taken and can take it out as and when you need (up to what ever the limit is) or the interest only lifetime mortgages.
      Thanks for the response.

      Yes, we liked the sound of that too. We wouldn't need a massive lump sum all in one go, just small amounts every few years.

      Re. interest only lifetime mortgage. With only two state pensions coming in, I doubt we'd meet the affordability checks to borrow much.

      However, one of these new hybrid products might fit the bill.

      Lifetime mortgage or retirement interest-only – which is right for me?

      "But there is a group of people in the middle – those who have some regular income but perhaps not enough to satisfy the affordability checks required for a RIO loan.

      But hybrid products are developing to bridge the gap between RIO and lifetime mortgages.

      For example, in April Legal & General launched an optional payment lifetime mortgage.

      This allows customers to pay some or all of the monthly interest, but also to stop paying whenever they like and add the interest to the loan."
      Last edited by stonehenge; 19 August 2019, 09:59.

      Comment


        #4
        There are some interesting products out there. Have you looked at interest rates yet or got any costings? I haven't got that far as it's still quite a way off for us.

        Comment


          #5
          Originally posted by doconline View Post
          There are some interesting products out there. Have you looked at interest rates yet or got any costings? I haven't got that far as it's still quite a way off for us.
          It's a few years off for us too, so interest rates could be different by then.

          Only looked at a couple of products but at around 4% they're not cheap compared with a normal mortgage. This one is offering 25% LTV at age 65, and 30% at 70.

          Equity Release Product Summary - Variable | Hodge Lifetime

          With interest at 4%, rolled up, the amount owing would double in 18 years; triple in 28 years.

          Comment


            #6
            Equity release

            I looked at this with a partner a few years ago, its an area paying very high commission to introducers so that immediately rang alarm bells with me.

            Comment


              #7
              Good comparison table of rates:

              Drawdown Equity Release Plans

              I doubt rates this low will be around in 10 years when we'd want to do it.

              Comment

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