Equity Release - A stable way to support your family

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Family and new beginnings are a significant part of life. With a lifetime mortgage, the most popular form of equity release available, you could use your property wealth to provide secure, accessible financial support to your family when they need it most

Can't wait to find out how much you could release? Use our handy calculator now.

UK property prices continued to grow during the latter part of 2017, with homeowners across the country enjoying the news that their homes are increasingly valuable assets.[1] For many of the nation’s younger generations however, this news was met with consternation.

Access to property is proving to be an increasingly difficult problem. Not only are rental costs increasing due to inflation,[2] but research has also found that prospective first-time buyers are underestimating the amount they need for a deposit. Whilst the average deposit is £49,639, the average amount saved is £34,397, leaving a deposit deficit of £15,388, or 31%.[3]

Many parents would dearly love to be able to provide the financial support to help their children close this deficit and realise their ambition of becoming property owners. However, £15,388 is a considerable sum, especially for those in later life when incomes traditionally decrease. There is a secure, flexible way for them to use their own property wealth to help their children however.

With a lifetime mortgage, over-55 UK homeowners can convert their property wealth into tax-free cash. Borrowed against their home, once the money has been used to clear any existing debt secured against the property such as an existing mortgage, the remainder is free to be spent entirely as they wish. That means that they could have the capital to give their children a much-needed leg-up onto the property ladder.

With a range of Lifetime Mortgage options available, the ways your property wealth could help your children are numerous. With a drawdown lifetime option, you not only release an initial lumpsum, but you can then continue to drawdown your remaining equity as and when you need it. This is an attractive option for those who may want to provide financial support towards regular expenses, such as tuition or other education costs. This is an increasingly popular motive for inter-generational lending in the UK.[4] 

All lifetime mortgages feature no obligation to make monthly payments, which may help boost your later-life finances, helping you enjoy the golden years you’ve always envisaged.

Secure access to your property wealth

One of the reasons lifetime mortgages are increasingly popular are the customer-focused safeguards that they feature. At Reader’s Digest Equity Release we will only offer our customers a Lifetime Mortgage from a provider approved by the Equity Release Council, meaning that our customers can enjoy all the in-built safeguards this provides. Both you and your partner retain full ownership of your home, until you both pass away or enter long-term care. A no-negative equity guarantee also ensures that no lifetime mortgage debt can be passed onto your family: you will never owe more than the value of your home.

As you are borrowing against your home, a lifetime mortgage will reduce the value of your estate, and it could affect your entitlement to means tested State benefits. We can provide you with a personalised illustration to help you understand the features and risks of a lifetime mortgage to you.

However you choose to use the tax-free cash of your lifetime mortgage, there is a real joy to being able to watch your legacy in action.

So, whether you're curious as to how much you can release, or you want to take the initial steps towards releasing equity, this handy calculator will give you the information you require.

Or you can contact us on 0800 029 1233 to discuss your needs with a view to arranging a no obligation face-to-face home visit with one of our financial advisers.

 

[1] Property Reporter, ‘UK house prices up 5.1% in November say ONS’, 16/01/17

[2] Property Reporter, ‘UK rents continue to rise’, 10/10/17

[3] What Mortgage, ‘First-time buyers underestimate the costs of buying a home’, 01/11/17

[4] The Telegraph, Millennials turn backs on their parents and tap grandparents for money’, 03/10/17

Reader's Digest Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (http://www.fsa.gov.uk/register/home.do) (http://www.fsa.gov.uk/register/home.do) under reference 610205. In using this website I give express consent to Responsible Life Limited to contact me on the details provided from time to time. Calls may be recorded for training and quality purposes. Any information contained herein is a personal opinion of the author and should not be considered to be advice of any kind. Inheritance Tax planning is not regulated by the FCA. Think carefully before securing other debts against your home. By consolidating your debts into a mortgage you may be required to pay more over the entire term than you would with your existing debt. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,295. Our adviser will talk through the setting up costs of a lifetime mortgage before you make any decision to proceed. Reader's Digest Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (http://www.fsa.gov.uk/register/home.do) (http://www.fsa.gov.uk/register/home.do) under reference 610205. In using this website I give express consent to Responsible Life Limited to contact me on the details provided from time to time. Calls may be recorded for training and quality purposes. This is a Lifetime mortgage which may reduce the value of your estate and may affect your entitlement to state benefits. To understand the features and risks ask for a personalised illustration. Any information contained herein is a personal opinion of the author and should not be considered to be advice of any kind. Inheritance Tax planning is not regulated by the FCA. Think carefully before securing other debts against your home. By consolidating your debts into a mortgage you may be required to pay more over the entire term than you would with your existing debt. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,295. Our adviser will talk through the setting up costs of a lifetime mortgage before you make any decision to proceed.