A combination of rising interest rates and wobbly house prices have dampened interest among the over-55s for equity release plans that enable them to unlock some of the value stored up in their homes.
Yet there are other ways for cash-poor, equity-rich homeowners to use their property to provide them with finance – as explained in a new free and comprehensive guide from The Mail on Sunday.
> Get your free guide to equity release
These options range from downsizing to retirement interest-only mortgages where a borrower pays monthly interest on a lifetime loan.
Free guide: The MoS has produced a guide to unlocking the cash from your home
With equity release, a homeowner does not pay interest. Instead, it is rolled up into the loan.
Industry experts say many homeowners looking at purchasing an equity release plan are biding their time in the hope rates will fall.
Interest rates are all-important for those releasing equity through such a plan. The higher the rate a homeowner locks into, the quicker their debt accumulates.
The loan is eventually repaid from the sale of the home when the borrower dies or goes into long-term care.
Although interest rates differ across providers and vary according to how old someone is when they take out a plan, they are currently priced between six and eight per cent.
This compares with an average price last autumn of 5.7 per cent.
Plan providers – such as Legal & General and Scottish Widows – do now allow borrowers to make free partial repayments in order to reduce the outstanding debt.
The Mail on Sunday has produced the complete guide to unlocking the cash from your home.
To request your free copy, call 0808 258 5160 or visit the link below.
