Are you ready to discover how much cash might be tied into your estate?
It could be a fortune, and you don’t even know it!
No documents are required. Simply enter your email address, and we’ll shortly send through your results.
Our goal is to assist you in discovering:
- The most amount of equity that’s available in your home
- How to successfully use your equity release plan
- The aspects that impact your calculation
Are you wondering why we’re the perfect team to assist you on this journey?
Our team of leading experts has combed the marketing to bring you the most accurate and up-to-date equity release information. We’ve reviewed plans from all equity release council members and analysed the data from 2021.
With that in mind, you must be excited to discover how much cash you might be in line to unlock. Find out now!
Do I Actually Qualify for Equity Release?
Before we get ahead of ourselves, let’s check that you qualify for an equity release scheme.
While there are a few types of equity release to consider, there are standard qualification criteria, which include:
- You must own a home in the United Kingdom1.
- The youngest homeowner needs to be at least 55 years old (this may be older in some cases).
- Your home needs to have a market value of £70,000 or more.
- You are required to have permanent residence in said home. It can’t be left unoccupied for more than 6 months at a time.
- You’re required to be mortgage-free or only have a small balance remaining. When releasing equity, you’ll first pay off your mortgage and then use the balance in any way you wish.
3 Reasons Why You Should Use Our Equity Release Calculator
- An equity release calculator is the first step in your journey towards a financially free retirement. It’s a simple process and easy to use. It takes just 8 seconds to complete.
- We take our responsibility seriously to protect your details. We’re fully transparent and upfront, and will not share your information with unauthorised parties.
- We’ll send you an email with your results. The process is that simple.
How Does One Calculate Equity Release?
Here are 3 factors are considered when calculating the amount of equity that you are eligible to release:
- The youngest homeowner’s age.
- The value of your property.
- In relevant cases, the condition of your health.
The maximum equity you can unlock will fluctuate with age. When you’re 55, you’ll have the option of up to 29.5% of the final determined value of your property. As the years go by, this amount caps at 59.28%.
Equity Release Calculator Results Explained
Take Note: While our calculations are based on factual information, the condition of your property and other factors may be considered in the lender’s final decision. Your lender will send a valuator who’ll determine the accurate price of your estate.
Additionally, the interest rate you receive will be based on the amount of equity you choose to unlock.
What Percentage of Equity Could You Be Eligible to Receive?
Your Loan to Value (LTV)2 is mostly determined by your age. Therefore, we’ve done some calculations for you to make things simple.
Here’s a table of the percentage of equity you could be in line to unlock. Once again, note that the age mentioned is that of the youngest homeowner. In addition, we’ve added an enhanced lifetime mortgage. This type of equity release is specifically for individuals who suffer from health or lifestyle conditions.
Equity Release Loan-to-Value Table
|Age of the Youngest Homeowner||Standard Equity Release||Enhanced Lifetime Mortgage|
Examples of Lifetime Mortgages on a £220,000 House
Check out how much cash you could be eligible to release, should you own a home around the value of £220,000!
At age 55
Decent Health: Maximum equity release = £64 900 (£2200,000 x 29.5%)
An Enhanced Lifetime Mortgage: Maximum equity release = £95 920 (£220,000 x 43.6%)
At age 60
Decent Health: Maximum equity release = £79 640 (£220,000 x 36.2%)
An Enhanced Lifetime Mortgage: Maximum equity release = £108 900 (£220,000 x 49.5%)
At age 70
Decent Health: Maximum equity release = £102 300 (£220,000 x 46.5%)
An Enhanced Lifetime Mortgage: Maximum equity release = £119 900 (£220,000 x 54.5%)
At age 80
Decent Health: Maximum equity release = £125 400 (£220,000 x 57.0%)
An Enhanced Lifetime Mortgage: Maximum equity release = £125 620 (£220,000 x 57.1%)
At age 90
Decent Health: Maximum equity release = £130 460 (£220,000 x 59.3%)
An Enhanced Lifetime Mortgage: Maximum equity release = £127 380 (£220,000 x 57.9%)
9 Factors That Will Impact Your Maximum Percentage
As no 2 cases are the same, there are some factors to consider regarding the amount of equity you can release from your home. Here are 9:
Medically Underwritten Equity Release Plans
Did you know that suffering from a medical condition could positively impact the LTV that you could qualify to receive?
While illness can be challenging, you can use your enhanced equity release scheme to unlock additional funds to spend on comforts that make these challenges easier.
In addition, all you’ll need to do is fill out a form, as no additional medical examinations are required.
With most equity release plans, you’ll be responsible for covering a lender fee.
This fee is generally only due when the loan is settled, but your equity release lender should tell you all these terms and conditions.
Pro Tip: To obtain the maximum amount of equity, you should see if you can arrange to add these fees to the total loan amount.
Equity Release Plans That Offer Cash-Back
Some equity release plans have a cashback feature that gives you extra income with no interest attached. You can use this cash in any way you wish.
While this amount is often based on the total equity you release and can come in around 2% and 5%, in some cases, the cashback total is a fixed amount.
Joint vs. Single Equity Release
As previously mentioned, the age of the youngest homeowner determines the percentage of equity you can release. However, some lenders might give you a special deal for taking out a joint equity release plan.
If you’re married and share your home, you might be obligated to unlock equity as a couple, but this could differ from one lender to the next.
Here are 4 circumstances where applying in one name would be best:
- Only one member of the couple owns the property.
- Your spouse has an alternative primary residence.
- One of you is under the age of 55.
- One spouse qualifies for vastly better interest rates.
It’s vital to note that if you don’t have a joint plan and the spouse without the plan outlives the equity release holder, they’ll no longer be eligible to remain in the home. However, if the plan is shared, you can both live there until you pass away or move into long-term care.
Property Construction Type
The type of construction of your property could impact the cash available for you to release.
The reason behind this is that your lender needs to ensure that their investment is secure. The loan is taken out against the value of your property, and generally paid off when you die or move into long-term care.
Therefore, your lender will want to ensure that the property is likely to sell for a decent profit.
If your house isn’t made of bricks and/or stone and isn’t tiled with a pitched roof, it might not qualify for some of the equity release plans available, or the LTV might decrease.
The rules have relaxed over the years, but there could be restrictions on certain property types.
The Location of Your Property
If you live on the mainland and your home meets the necessary requirements, then you should qualify.
Residents of Scotland have fewer plan options, and only 2 lenders have plans available in Northern. This could impact the deals you could be offered.
In addition, other islands that are off the mainland will also have limited plan options.
With equity release mortgages more popular than ever, lenders now offer plans with fantastic features. Look out for deals and specials that often pop up on the market.
These may include:
- An early repayment charge
- Competitively low interest rates.
- A free professional home valuation.
However, don’t be caught by flashy offers. Always look at your plan holistically to determine the best course of action for you and your family.
Lodgers in Your Home
If your children, family, or friends live with you, some equity release lenders might not offer you a plan or propose inflated interest rates.
This might not be an issue in all cases, so we recommend you discuss this with your financial adviser.
Second / Holiday Homes / Buy-to-Let
Our equity release calculator is specifically for your primary residence.
Did you know?
There are types of later life lending that’ll cover your second home, holiday home, or buy-to-let property, which will use a different calculation.
How Do You Calculate Equity Release?
Simply multiply the LTV (loan-to-value ratio) by your property’s value. The amount you seen is the maximum you can release from your property.
How Much Equity Do I Qualify For?
The maximum amount you can borrow is up to 55% of the value of your property, depending on your priority. To determine the exact amount, it’s advised to use an ER calculator. Another calculation that might give you a rough idea is this:
Current appraised value ($500,000) – Mortgage balance ($240,000) = Home equity ($260,000)
How Is Interest Calculated on Equity Release?
The plan has an interest rate calculated on a fixed rate of compound interest. Interest is calculated each day but added to the loan amount monthly or yearly.
Equity release could be the secret to unlocking your retirement dreams. It’s a great way to stay in your home, maintain your lifestyle, or purchase some luxuries that you’ve always dreamed of. However, it is a major decision, and one that should be carefully considered.
Now that you know how much equity you might be eligible to unlock, you should contact your independent financial adviser to discuss all your retirement options and equity release alternatives.