Lenders will base the amount you can borrow on your age, the value of the property, and sometimes your health. Interest rates on lifetime mortgages are usually higher than those on standard mortgages.
Capital release fromcomparison site The supermarket shows that the rates of several suppliers range from 2.86% to 6.9%. The lifetime mortgage interest rate available to you will largely depend on your age, the value of the property, the amount you want to release, and the type of plan you choose.
Your lawyer will work with you to make sure everything is in order until your money is released. To meet Equity Release Council standards, all lifetime mortgages must have fixed rates or, if they are variable, there must be an upper limit “cap” that is set for the life of the capital release product. Many capital release products offer borrowers the opportunity to repay interest if they wish to do so. They will also help you understand the characteristics and risks, including the fact that releasing capital will reduce the value of your equity and could affect your entitlement to revenue-controlled profits.
If you're considering freeing up capital, it's important to consider the pros and cons and get expert advice before making any final decisions.
Equity release mortgagerates have risen almost half a percentage point in the last year, leading them to rise from previous record lows. Fixed capital release interest rates are set from the start and do not need to be renewed; they are fixed for life, regardless of the duration of the mortgage. However, it's worth remembering that while the interest rate may be low, there may be hidden costs and charges associated with the plan.
With all capital release plans, interest accrues on the amount you release and will accrue over time (meaning interest will be charged on interest). 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. The main rates of capital release, particularly for a lifetime mortgage, are generally higher than standard mortgage rates. Even if you already have a capital release, you may now be able to get a lower interest rate plan that could save you thousands of pounds.
If a traditional equity release plan is not an option for you, you may consider re-mortgaging to withdraw equity from your property. Leave your contact details below and a member of the capital release team will call you to discuss your needs.