Considering the impact of house prices If you’re considering equity release, it’s important to consider the value of your home now and in the future, as it will affect any potential inheritance you want to pass on.
Over the last few decades, average UK house prices have risen steeply; more than doubling in the last 20 years. If you take a lifetime mortgage and house prices continue to rise, you may build up more equity to leave to your loved ones, as the plan continues over time. Please remember that compound interest will continue to accrue over the term of the plan.
However, it’s also important to understand that house prices may fall during the life of your plan, which would reduce the amount of inheritance remaining. But we can recommend a lifetime mortgage where you never owe more than your home’s worth or pass on any equity release related debt to your loved ones. There’s more information available about the no negative equity guarantee, and others, on page 26.
“The money we released has also given our children a boost to get on the property ladder”
DAY ONE
AFTER 15 YEARS
Lifetime mortgage
Lifetime mortgage + interest
— £197,888
Equity remaining in your home
— £281,616
Retired couple Patrick and Christine from Buckinghamshire were looking for a way to pay off their existing interest-only mortgage. “Although we had savings to pay this off, it would leave us with little money in retirement. We didn’t want to be left with no savings. After looking online, The Equity Release Experts appeared to be the most respected and knowledgeable company to turn to. We did our research and agreed that this would be the most suitable option for our needs." “We contacted The Equity Release Experts, who organised an adviser to visit us and discuss our options. He was very helpful and there was no pressure to proceed. When we decided to go ahead, the process was very smooth and we felt relieved to have finally paid off our existing mortgage. The whole time it felt like something was hanging over us and now we can just enjoy our retirement without worrying. The money we released has also given our children a boost to get on the property ladder. It has been nice to help them when they need it the most.”
Equity remaining in your home
— £223,914
Lifetime mortgage plus interest
— £81,703
Lifetime mortgage
Property value £363,319
Property value £421,802
House price growth can help build further equity in your property which can be passed on as an inheritance or accessed again in the future through equity release.
This example assumes a fixed interest rate of 6.74% MER (Monthly Equivalent Rate) and house price inflation of 1%. Please note that these are only examples and the value of your house could go down or not increase at the same rate. Lifetime mortgage amount and property value are based on the average values in the Key Market Monitor Q1, 2023.
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