The Question
This idea might sound crazy – but can equity release ever be used to pay off a current mortgage?
My wife and I are due to remortgage on our three-bedroom semi and the rates we are looking at seem so high compared to what we have been paying.
We still have £150k left to pay but our house has increased in value since we purchased it and is now worth more than £600k (yes, you guessed it, we’re in London!).
We are both in our late 60s and the cost of our mortgage is preventing us from enjoying our retirement. Is equity release an option?
Mark’s Answer
Thank you for your question and I can assure you that this is not a crazy question, because it is asked every day when customers approach Equity Release Supermarket searching for a solution to replace their current interest-only mortgages.
We have found that customers circumstances have changed where some thought that their current mortgage would run indefinitely, or they planned to downsize to replace their mortgage, but now prefer to stay in the home they love.
As you are looking to replace your mortgage, to be able to give you any guidance, it is important to understand more about your current plan and what you are looking for in the future. When you are looking for a replacement mortgage you have several choices including an Interest only mortgage when you would be committing to service the interest only for the rest of your lives.
Secondly, a flexible Lifetime mortgage where you can decide if you want to make flexible regular monthly payments, adhoc payments or no payments at all. For example, based on a customer who is 65 and a property value of £600,000, they may be able to borrow £207,000 from a flexible Lifetime mortgage.
However, before I jump to a conclusion regarding your choices for a replacement mortgage, it is really important to consider the options with your current plan including if it is capital and interest, the term outstanding, if there are any early repayment charges and the term you have until it is repaid.
Once your options with your current plan have been established, it will be easier to advise you and determine the best solution for you and your wife.
To help and advise you without obligation, our friendly, expert independent advisers will be delighted to discuss the options with your existing plan and possibly advise you on a suitable replacement.
Meet our expert…
Mark Gregory, founder and CEO of Equity Release Supermarket, is here to answer your questions. Mark is an adviser himself with over 20 years equity release experience.
He launched Equity Release Supermarket 10 years ago and it has grown to become one of the UK’s leading equity release specialists.
Email kate.saines@emap.com to ask Mark a question
Loading ...