The younger applicant has to be 55 and a homeowner. The house to be mortgaged is almost more important than the applicant! The amount that can be borrowed is directly related to the age of the applicant and the value of the house. For example, the national average house price is £253,000, so a 65-year-old could borrow about 38% or £96,000 as a maximum.
There are no requirements to make any payments but modern plans allow for regular or ad-hoc payments to be made but only if you want to.
You can borrow for many purposes. 2022 is seeing a lot of applicants looking to repay existing conventional mortgages. Gifting to help the family is popular, major home improvements to update the house and improve standards of living and of course those bigger capital purchases like a new car.
Finally, there are the guarantees offered by the Equity Release Council. The right to stay in your home for life or until the second party moves into long term care and the house becomes empty. The right to move home and take the mortgage with you, subject to lenders criteria and the amount outstanding “fitting”. Finally the No Negative Equity Guarantee that means you will never leave a debt to your estate and beneficiaries.
Check out our previous article here.