Retirement Mortgage for Equity Release - Explained
What is a Retirement Mortgage?
- A mortgage debt on your home.
How does it work?
- It is an interest only mortgage scheme.
- You release equity and interest is charged every month.
Do I have to make payments?
- Yes, you pay the interest accrued each month.
- Provided you meet the interest payments, the debt will remain the same.
Is my home safe?
- You have a permanent right to live in your home until the day you die or sell your home or move or go into a care home
- If you do pay the interest off, the equity release company may look to convert the mortgage to a lifetime mortgage or indeed take action to force you pay the interest off
How much equity can I release?
- This will be linked to your income.
- You will not be allowed to release more than you can afford
Who are retirement mortgages suitable for?
- If you need flexibility to sell, move, have more money later
- If you may inherit money meaning your wish to pay the mortgage off
- If you plan to move, sell up and pay the debt off
- If you have a high, secure guaranteed income
Can there be negative equity?
- If you make all monthy interest payments, the debt will not mount up.
What sort of interest rates?
- Interest rates are usually similar to normal mortgage rates and sometines around 1% higher
- There are both fixed and variable interest rates
Can I release more later?
- Yes, but again this will be linked to your income
- You will only be allowed to borrow more if you can afford it