A capital release mortgage involves a lender giving you cash in exchange for a portion of the proceeds from the sale of your property later on. But unlike a traditional mortgage, which you pay within a certain period of time, a capital release loan is not settled until you leave your home. Capital release refers to a range of products that allow you to access capital (cash) immobilized in your home if it is older. You can accept the money you release as a lump sum or, in several smaller amounts, or as a combination of both.
Equity release is a type of loan that allows older borrowers to access some of the money tied up in their property. There are different types, such as a life mortgage or a home reversal plan. The amount you can borrow will depend on your age, the lender, and the value of your property. At Legal & General, we only offer lifetime mortgages.
You can find out how much you could free with our capital release calculator. For more information on how interest is calculated on a lifetime mortgage, visit our Lifetime Mortgage Interest Rates page. Lifetime mortgages (a type of equity release) and retirement interest-only mortgages are sometimes grouped as “later-life mortgage” or “later-life loan” products. While they are similar and are often used for similar purposes, these are different products and it is important to understand the differences between the two.
There may be cheaper ways to borrow money. Here are some of the things you should think about if you are considering downsizing or applying for a lifetime mortgage, a form of capital release. OneFamily also offers advice for a flat fee of 950 pounds sterling, paid at the end, rather than as a percentage of the loan, so there are no hidden surprises. Times Money Mentor has been created by The Times and The Sunday Times with the goal of empowering our readers to make better financial decisions for themselves.
To do this, we provide you with the tools and information you need to understand the options available. We do not make or intend to make any recommendations in relation to regulated activities. As we are not regulated by the Financial Conduct Authority, we are not allowed to give you such advice. When we give suppliers or products a customer experience rating or product rating, they are compiled according to objective criteria, using information collected by our partner Fairer Finance.
In some cases, we may provide links where you can, if you wish, purchase a product from a regulated supplier with whom we have a business relationship. If you buy a product through a link, we will receive a payment. This will help us to support the content of this website and to continue investing in our award-winning journalism. A capital release provider will provide you with a lump sum or income in exchange for a portion of the value of your home.
This is achieved through a type of mortgage or by selling that part of your home on the condition that you can continue to live there as long as you want. There are two types of equity release; lifetime mortgages and housing reversal plans. Both are regulated by the Financial Conduct Authority. By using an equity release product, a homeowner can take out a regular lump sum or smaller sums of the value of their home, while staying in their home.