The maximum amount available depends on a number of factors; the largest being the age of youngest homeowner, and the property value.
How does the calculation work?
With an Equity Release plan, the minimum you can release is £10,000.
Equity Release lenders use your age to work out how long they think you will live, and how long they expect the plan to last. As some people will live longer, and some shorter, it is essential to discuss this with your equity release advisor.
If you anticipate living longer, the maximum available will still be based on what the lender calculates your average life expectancy to be. If you think you will live longer, there are additional considerations that it is sensible to consider. For example, the amount of interest that will be charged will be more considerable if the plan runs for longer. While you are not required to make any payments during the plan, the interest charged is calculated on a daily basis and added to the total amount you owe the lender. Similarly, if you anticipate living longer, it is sensible to consider what care you may need when older, and who is likely to pay for it.
If based on existing health and lifestyle factors, the lender thinks you may live less than average; you could be entitled to release more. There will be a simple health questionnaire to complete, and the lender may ask for access to your medical records as part of any equity release application.
Please note that if you are making an application in joint names, the calculation is based on the youngest applicant.
Let's look at a couple of examples:
At age 55:
The maximum amount you can release is currently between 25.9% if you are in perfect health and 38.1% of the property value if you have impaired health.
At age 80
The maximum amount you can release is currently between 54% if you are in perfect health and 56% of the property value if you have impaired health.
To find out how much you could release, use the above form. Alternatively contact one of our friendly advisors who will be happy to discuss the amounts and associated interest rates with you.