You can repay the capital release early at any time, but you may be charged a penalty for doing so, in the form of an Early Repayment Fee (ERC). If you want, yes, you can, absolutely. However, it is important to reiterate how a lifetime mortgage with capital release is designed to remain in effect for the rest of your life or as long as your health allows you to continue living in your primary residence. Protection against downsizing is another excellent exemption offered by some lenders.
This exemption allows you to pay your capital release ahead of time when you move home, without incurring any early repayment fees. You can pay the capital release ahead of time. However, depending on the lender and the type of lifetime mortgage you have, early repayment fees may apply. Some equity release providers allow you to make early repayments after a fixed number of years.
Others allow you to pay a percentage of the loan each year. If you pay a lifetime mortgage early, you may have to pay an early repayment fee. These fees can be quite expensive, but before you sign up for your plan, you will have been given information about the maximum you may have to pay if you decide to repay part or all of your loan ahead of time. A generous free valuation is offered along with a lifetime interest rate of fixed capital release on the initial lump sum.
Early repayment fees may apply if you decide to repay your capital release plan ahead of time or want to make a higher payment than agreed upon in your mortgage offer. Yes, you can pay the capital release ahead of time and you can make a partial or full refund whenever you want. If you are 55 or older and you find yourself rich in real estate assets but with little real money in the bank, you can use a capital release scheme to unlock the value of your own home, converting a paper security into real money. Some lenders set a penalty for early repayment during the first few years of a capital release mortgage, for example, the first five years.
The capital release plans with fixed rate ERC offer the assurance of knowing exactly what the penalty charge will be before entering into the agreement. In addition, all lifetime mortgages approved by the capital release council require that the lender cannot request early repayment of the money under any circumstances. Unlike conventional mortgages, a lifetime mortgage does not have a fixed term in which all the money owed, plus interest, is repaid in full. It is possible to obtain capital release without early repayment fees, but not all providers offer this option.
But don't worry, your Equity Release Supermarket advisor is the expert when it comes to early repayment charges. If you are considering canceling your capital release ahead of time, talk to us for advice on releasing capital and make sure you get the plan that best suits your needs. If you think you might be able to repay your capital release plan at some point in the future, it's important to mention it to your financial advisor early on. As capital release providers are providing loans for many years, in some cases more than 40 years, they need to establish their long-term loan plans accordingly.
Despite this, you can make payments against the capital release plan or repay it in full at any time. Equity release is growing in popularity as a way for homeowners aged 55 and older to finance a more comfortable retirement. .
