The Question
I own two properties – the home in which I live with my husband and a holiday home in Devon which is used only by us, our family and our friends – we don’t rent it out to holidaymakers.
We would like to release equity to pay for our grandchildren’s school fees. Which home is it advisable to take the equity release out on? We don’t want to sell the holiday home as we use it for family gatherings.
Our main residence is valued at £650,000 and the Devon property at £425,000. I am 70 and my husband is 72. Thank for your advice.
Mark’s Answer
Thank you for your question, and I can confirm that following the economic downturn in late 2023, unfortunately, there are no current equity release providers who will consider lending capital on a holiday home. However, please continue to visit our website or sign up for our frequent and informative email notifications and we will keep you informed on any future developments.
As the only choice for equity release is on your main residence, I would strongly recommend that you now take independent whole of market advice from one of our trusted experts who will be delighted to make a bespoke plan for you and your husband.
You will retain 100% ownership of your home, and you could secure a Lifetime mortgage subject to a satisfactory valuation and raise the capital you need for your grandchildren’s education.
The flexible Lifetime mortgage allows you to borrow an initial lump sum with a fixed interest rate for life and you could drawdown further capital when required to pay for the education costs when they materialise.
Based on your main residence’s valuation and your current ages you could release up to 42% of the value of the property.
Tailoring your plan to your needs
However, any recommendation would be tailored to suit your school fees plans for the future by taking a drawdown lifetime mortgage and being able to subsidise the fees as and when they arise, rather than taking one large lump sum.
The benefit of drawdown is you are only charged interest on the amount withdrawn, not the funds left in the cash reserve facility.
As noted, our experts are here to help and provide you with a bespoke solution without any initial charge. This is because you only pay for their advice once you have accepted their recommendation, your home has been independently valued, and you have taken independent legal advice.
Please feel free to ring 0800 802 1051 or alternatively, you can use the smartER tool on the website to complete your own research www.equityreleasesupermarket.com
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
