Once you start thinking of equity release you may want to know how much equity you can release. In the first instance to be eligible for any equity release product you will have to be at least 55 years of age and have some equity in your property which can be released.
How much equity release you may be able to get will be based on your property and your personal circumstances.
Different equity release providers also have their own criteria on the max amount of Loan to value they will offer you on their equity release provider. This may be a key consideration for you when considering which equity release provider to choose from.
The average equity release being given to borrowers these days is around 35% but there are some equity release providers that will provide up to 50% of the value of your property as an equity release.
You may want to consider this when looking at equity release providers.
The amount of equity release you will be able to get will have to do with your property. Some equity release providers will insist the property value is at least £70,000 and you may have other equity release providers with higher property minimum values and those who cap the value of the property at a maximum rate.
The equity in your property
The amount of equity you have in your property will also be a significant factor in how much equity you can actually release. Some equity release providers will require you have a minimum amount of equity in your home before they will release equity to you.
The property type
Your personal circumstances
Your personal circumstances also play a big role in how much equity release you can get. If you are terminally ill or likely to die soon you may find that equity release provider is more willing to offer you an increased amount of equity release.
How do I release equity from my house?
To release money from your house you will need to be at least 55 years old and have a property which is unmortgaged or mortgaged with sufficient equity in it for you to potentially release.
With an equity release product there are no monthly mortgage repayments(except you choose to have them) and the balance owed is paid off when you die or move into a care home.
There are a variety of equity release products which you can use to release equity from your house. They include:
To release equity from your house you should contact an equity release adviser who will be able to compare your equity release options and let you know what the most suitable way for you to release equity from your house is.
What can you do with money released from an equity release provider?
You can do as you like with the money released from an equity release provider.
Homeowners are releasing over £1.5bn from their homes in each half of the year and these funds are used to go on holiday, to make investments, to give their family members a mortgage deposit and any other things they may wish to do.
Can you have equity release if you have a mortgage?
The balance of your mortgage which is paid off will be added to part of the equity which you have released.
Can I leave an inheritance to my family with equity release?
Yes, you can leave money to your family even if you have an equity release product. You can ringfence some of your equity to pass down to your family when you die. Most equity release providers are now part of the equity release members council which all have a no negative equity guarantee. This means that the amount you owe on your equity release product will never be more than your property is worth.
Regulations laid down by the governing body: the equity release Council have capped the maximum amount of capital you can release, and some lenders will insist on minimum loan amounts to ensure it’s worth their while – read on to find out what the maximum and minimum amount of funds you could access via equity release are.
What is the maximum amount of equity release I can take?
The equity release council has guidelines which prevent any of its members from offering an equity release of more than50% of the value of their homes. This means the maximum equity you may be able to release will be 50% regardless of how eligible you are.
What is the minimum amount of equity release I can take?
The minimum property price you will need for an equity release is £70,000.
How much equity do you need to release?
The amount of equity you may need to release will be based around your needs. Some equity release providers will let you have a drawdown mortgage equity release which allows you to take money out when you want.
Is equity release a safe option?
equity release could be considered a safe option when a no negative equity guarantee is in place. You should be aware that equity release products do work with compound interest which can make them very expensive.
Is equity releasea good idea?
What is the downside to equity release?
equity release could also mean that you don’t have any inheritance to pass on to your kids.
equity release could also make you ineligible for means-tested benefits. If you claim means-tested benefits you may want to seek independent financial advice.
Yes, you may be able to pay back your equity release by redeeming your equity release product before you die or move into a care home by paying any outstanding balance. There may be an early repayment charge associated with doing this and it could be significant.
How much equity do you have in your property?
To calculate how much equity you have in your property you should find the value of your property and then subtract andy debts owed on your property such as your mortgage. Whatever is left is the equity you have in your property.