Interest-only time bomb

Can your home solve your interest-only mortgage headache?

borrower commitment concept

The 80's and 90's have a lot to answer for.

Millions of interest-only mortgages were sold at the time, resulting in nearly one million homeowners now having no plan for how to pay it off when it reaches the end of the term.¹ If you have time on your side, switching to a repayment mortgage may solve your problems, but if you are nearing retirement, you'll need an alternative solution. One of the viable options for the over 55's is equity release.

Equity release allows homeowners who are aged 55 and over to release some of the equity tied up in their home and turn it into tax-free cash.

With equity release market conditions, such as low lifetime mortgage interest rates and favourable house prices we have seen a significant uplift in the number of interest-only borrowers who don't have a repayment vehicle in place turning to equity release to repay their outstanding, standard mortgage.

UK average house prices have risen by 23% since 2012.² This means homeowners could have more equity than they thought and may be able to access enough tax-free cash to cover their standard mortgage shortfall and even have some left over to spend on anything they wish.

What's more, it has recently been reported that UK house prices will rise by £40,000 in the next five years.ᶾ This is great news because with many equity release plans, homeowners can maintain 100% homeownership⁴, meaning they could benefit from any future increase in its value.

Other benefits of equity release can include either the option to; make no monthly repayments, move home in the future and protect part of the property's value, meaning money can be left for their beneficiaries.
Those who are considering releasing the cash locked up in their homes should seek independent, impartial advice to ensure that it is the best option for them.

Whether they are looking to release cash to pay off their standard mortgage, make home improvements or just looking to boost retirement finances, companies like Age Partnership could help.

A qualified advisor will tell you everything you need to know about equity release, including the effect on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected now or in the future.
To find out more about equity release including how much money you could release from your home, Click here or call us on Freephone 0800 464 0721.

Equity release may involve a lifetime mortgage or a home reversion plan. To understand the features and risks, ask for a personalised illustration.

Age Partnership provides advice for free and without obligation. Only if you choose to proceed and your case completes would a typical fee of 1.7% of the amount released by payable.

¹The Citizens Advice Service ²Nationwide July 2012 to July 2016 ᶾ The Centre for Economics and Business Research ⁴You only continue to own your home with a lifetime mortgage, secured against your property.

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