Dorset Financial Planning can arrange Equity Release and Lifetime Mortgages tailored to suit you - Equity Release Bournemouth

Call Julia on:
07862 708429 or 01202 416856
Enquiries:  07862 708429
Call Julia on:
07862 708429 or 01202 416856
Go to content

Dorset Financial Planning can arrange Equity Release and Lifetime Mortgages tailored to suit you

Equity Release Explained

Mainstream Mortgages compared to Hybrid and Lifetime Equity Release Mortgages

There are 4 main types of mortgages available to you when you are over 55:

1. RESIDENTIAL MAINSTREAM MORTGAGE
MAXIMUM AGE: typically 70 to 80 years old with the requirement to prove you can repay your mortgage each month and the total mortgage amount when you reach maximum age. There will be a minimum term before you reach the maximum age.
REPAYMENT VEHICLE: potentially the sale of the property, pension tax free lump sum, investments or assets.
MONTHLY MORTGAGE REPAYMENTS: sometimes they will accept interest only repayments if you have an acceptable repayment vehicle. Otherwise, the lender will require capital and interest repayments.

2. RETIREMENT INTEREST ONLY MORTGAGE
MAXIMUM AGE: no maximum age as it has no end date providing you can pay the mortgage payments each month.
REPAYMENT VEHICLE: mortgage is then repaid when you home is sold due to you moving into long term care, or you and your partner die.
MONTHLY MORTGAGE REPAYMENTS: interest only repayments with potentially the option to make overpayments in addition to monthly payments.

3. RETIREMENT MORTGAGE
NO END DATE
REPAYMENT VEHICLE: mortgage is then repaid when you home is sold due to you moving into long term care, or you and your partner die.
MONTHLY MORTGAGE REPAYMENTS: interest only repayments with potentially the option to make overpayments. However, if you are unable to make those monthly mortgage repayments you can roll up the interest.
LOAN TO VALUE: much lower than the mortgage options described above.
MAXIMUM MORTGAGE: lower than the previous 2 mortgages described above.

4. LIFETIME EQUITY RELEASE MORTGAGE
NO END DATE
REPAYMENT VEHICLE: mortgage is then repaid when you home is sold due to you moving into long term care, or you and your partner die.
MINIMUM AGE: typically 60 with no maximum age.
MONTHLY MORTGAGE REPAYMENTS: not required and with some equity release lenders restricted to 4 x a year. No affordability assessment it undertaken by the equity release mortgage lender.
LOAN TO VALUE: the lowest available compared to the previous 3 mortgages described above. Typically between 20% and 45%.
MAXIMUM MORTGAGE: lower than the previous 2 mortgages described above.

With the liftetime equity release mortgage, it provides you with a tax-free cash lump sum. This can be borrowed on the following basis:
  • With monthly interest only repayments (and the option to over-pay up to 10% of the initial mortgage)
  • Or with compound-interest being added to the total mortgage borrowed until the plan comes to an end.

The amount you can borrow depends on:
  • The value of your home
  • Age
  • Health
  • Lifestyle

Drawdown Equity Release Lifetime Mortgage

This is similar to a lump-sum Equity Release plan, but comes with more flexibility.

You decide on the maximum you feel you will need to borrow. You can then choose to  access or 'draw-down’ against this amount, a portion at a time. over a period of time.  The interest is added on the amount you draw-down, so the interest builds up more slowly than if you released the full amount at the outset.

Further tailoring is possible with Equity Release and Lifetime Mortgages

  • HEALTH CONDITIONS – if you or your partner suffer with any health conditions or make certain lifestyle choices, you may be able to get a better interest rate and release more money.
  • INHERITANCE GUARANTEE – you can ring-fence a portion of your property value so that a percentage of the future value of your home will be left to your family when the property is sold due to you moving into long term care or you and your partner die.
  • PAY OFF SOME OF THE MORTGAGE – a feature you normally find with residential mortgages. You can make ad-hoc repayments of up to 10% of the initial mortgage (you may receive an inheritance) which  results in lower monthly accrual of interest.
  • DOWNSIZING PROTECTION – if you use an Equity Release Council approved lender then you can take your loan to a new property. However, if you need to move to a smaller home and the new home is not acceptable to the lender, you can pay the loan back early without penalty.
  • PAY SOME OF THE INTEREST EACH MONTH – you do not have to pay all of the interest due each month nor do you have to roll all of the interest up, there is an option in between. The advantage being that less interest will be added to the total mortgage
You can search our website here
Contact Us

Address:  7 Ravine Road, Bournemouth, BH5 2DT
Phone:  07862 708429 or 01202 416856

Dorset Financial Planning is an appointed representative of Beneficial Life (London) Ltd, which is authorised and regulated by the Financial Conduct Authority, FCA number 736655. Dorset Financial Planning is authorised and regulated by the Financial Conduct Authority, FCA number 779271.
Back to content