Equity Release Rates
Compare Options for Equity Release Rates for your Home
If you are an older home owner looking to raise some capital without having to downsize or move to a different area you might be considering equity release as a solution but wondering about what the interest would be on your plan.
Types of equity release and their rates.
- Roll-up mortgage: In this plan type interest is added onto your loan either monthly or annually. You do not make any repayments on the debt or its interest instead the whole amount is repaid through the sale of your home when you either pass away or permanently move into assisted living. It is important to understand that as the interest is compounded on this loan type the amount owed can increase rapidly. Most plans however offer a ‘No Negative Equity Guarantee’ which means no debt can be passed on to your estate and you will never be charged more than the amount your home eventually sells for. Some of these plans also allow you to protect a portion as an inheritance.
- Interest only mortgage: Like a traditional mortgage with this plan you pay monthly or annual interest repayments on your loan, the original sum you borrowed however is sold off through the eventual sale of your property. Your specific interest rate will vary on several factors including : Your age, Whether you want a joint or single mortgage and how much you want to leave behind to your beneficiaries.
- Fixed Repayment lifetime mortgage: With this kind of mortgage you do not pay not have to worry about interest rates at all. Instead you agree with the lender on a higher sum they will eventually be repaid through the sale of your home.
Home reversion is a different type of equity release. In this type of plan you sell your property to a home reversion company for less than its market value, in return they will give you a lump sum or pay you a regular ‘income’. You will also be able to live in the property indefinitely until you and your partner either pass away or move into permanent assisted living. Some plans may charge you rent at a reduced rate; others will let you stay there for free.
Costs and charges.
Most equity release plans will require an initial arrangement fee as well as a fee for the valuation of your property; these costs vary from lender to lender You will also have to pay legal costs of between £300 and £700 and if you repay your lifetime mortgage before the end of the contract you may have to pay an early repayment charge. Find out more about equity release.
How to find out more.
To find out more about the different types of equity release and their rates click the link and fill in the form and an equity release specialist will get back to you with free, no obligation quotes and advice.