The best equity release companies are the ones with the lowest rates and no fixed early repayment charges. There are also equity release plans that penalise people that have flats or leasehold properties. The initial loan amount can be much lower because the market value is cut down to 85% of the property valuation.
The good news is equity release products in the UK are becoming very competitive so if you what to release equity and realise some of your property value you can get great financial advice to discover the lowest interest rates.
Equity release is usually achieved in the form of a lifetime mortgage that is subject to the no negative equity guarantee and rules from the equity release council. An alternative to flexible lifetime mortgages is getting a tax free lump sum from one of the many retirement mortgage providers. The other option is looking at home reversion schemes.
If you are able to make monthly payments how much money you can borrow can change significantly. The best equity release providers are often not equity release at all they are just retirement interest only mortgages, sometimes referred to as RIO.
Getting the right equity release plan requires the knowledge of someone that knows the entire equity release market, and the equity release product exact terms. It’s hard to guess how bad an early repayment charge could prove because to don’t know for sure how peoples personal circumstances could change.
Characteristics of leading equity release providers
These are the features to look out for to get the best equity release deal:
- They offer a free equity release calculator without asking for personal information
- They have competitive equity release interest rates
- They offer you options with monthly repayments if you have the income e.g pension credit
- They offer you a drawdown lifetime mortgage if you don’t need all the tax free cash in one lump
- They are equity release council members
- They make you aware of any early repayment fees
- They offer you a flexible lifetime mortgage
- They offer you an equity release scheme with a downsizing repayment charge exemption
Best equity release companies and products include
- Bridgewater Equity Release
- Pure Retirement
- Nationwide equity release schemes
- Premier Flexible Lifetime Mortgage
- Aviva equity release deal
- Legal & General equity release mortgage
- Canada Life lifetime mortgage market
- Engage Mutual society
It could be wise to get the best equity release advice from an independent financial adviser as they could have a registered office you can go and find out the best equity release lender from them. It could be the case you are better off with an interest only mortgage to maintain your cash reserve.
Many lifetime mortgage providers and most equity release plans allow partial repayments if you want to keep the interest down after you release cash.
The maximum amount in a cash lump sum is typically just over 50% of your properties value. The best equity release plan will likely offer less money than this, this is just how equity release plans work.
Drawdown lifetime mortgages are different as you start off with a small sum of money and you draw down more money over time.
Best Equity Release Companies
Some of the most common pensioner loan products include Lloyds Bank lifetime mortgages, Barclays interest only mortgages for over 65 year olds, Halifax pensioner mortgages, L&G pensioner mortgages and Nationwide BS mortgages for over 60s.
Popular loan to value percentages of Lloyds Bank lifetime mortgages for over 55s, HSBC interest only retirement mortgages for over 70s, Post Office later life interest only mortgages over 75, L&G later life interest only mortgages over 60, Royal Bank of Scotland mortgages for people 60 plus and Nationwide Building Society mortgages for 60 plus pensioners are 35%, 60% and 65%.
Some of the most popular loan to value percentages of LVE mortgages for over 50-year-olds, More to Life later life interest only mortgages over 75, One Family mortgages over 70s, Yorkshire Bank later life interest only mortgages over 60, Royal London pensioner mortgages over 55 and Axa mortgages for over 50-year-olds are 40%, 60% and 70%.
Some of the most popular LTV ratiosof Aviva later life interest only mortgages over 70, Zurich mortgages for pensioners over 60, Leeds Building Society retirement interest only mortgages over 60, Coventry Building Society retirement mortgages over 60, Nottingham Building Society retirement interest only mortgages over 75 and Progressive Building Society pensioner mortgages over 55 are 50%, 55% and 65%.
Difficult to mortgage home variants include properties currently undergoing substantial alterations, extensions or repairs, properties where multiple third parties are living in an annexe, right to buy – properties in Scotland, properties where the customer is offering only part of the title as security for the loan and properties with leased solar panels.
Difficult to finance home types can include Timber-framed properties constructed post-1965, timber-framed properties built between 1920 and 1965, properties constructed or converted within the past 10 years, studio flats outside the M25 and basement or lower ground floor flats with level access to private or communal garden space.
Tough to finance property variants include grade ll Listed houses (grade C in Scotland and B2 in Northern Ireland), properties with flying or creeping freehold which comprises 15% or less of the total floor area, agricultural use of the land and any outbuildings, properties using rooms, land or outbuildings for business purposes which are not personal to the borrower(s) or which extend to more than 50% of the property to be secured and properties adversely affected by existing or proposed issues including roads, rail, airports, power plants, power lines/pylons, wind turbines, substations, sewage works, quarries, fuel stations, refuse sites, sports grounds, noise, light or environmental pollution.
Tough to mortgage home variants can include rentcharges properties with a high estate rentcharge, high service charges – properties where the Service Charge per annum at the time of application is more than 2% of the property value, properties where there are boundary disputes or where planning applications have not been applied for correctly, asbestos construction and Airey, Boot, Cornish Unit, Dorran, Dyke, Gregory, Hamish Cross, Myton, Newland, Orlit and Parkinson Frame.