Equity Release

A fast, flexible way to release the cash locked up in your home. Available to homeowners aged 55 and over.

Equity release services are referred to a third party. Neither Novum Mortgage Services Ltd or PRIMIS are responsible for the service received

Equity Release

Equity release (Life-Time Mortgage) is a flexible way for homeowners who are aged 55 or over, with a property worth at least £70,000, to release tax-free funds. There’s no need to sell your property and the safeguards built into the provider’s plans allow you to access money without having to make monthly repayments if you don’t want to.

No negative equity guarantee and built-in inheritance are some of the protection measures now in place to reassure your loved ones are protected. However, be aware that this may affect any means-tested benefits you may receive from the government.

A Lifetime Mortgage will reduce the value of your estate and may affect your entitlement to means-tested benefits and tax status.

The impact of not servicing monthly interest payments on a Lifetime Mortgage is that the outstanding debt can grow rapidly, thus reducing the value of your estate.

For example, if the interest rate was 7% a year, a £50,000 loan would double to £100,000 after 10 years assuming no repayments are made.

This is an example for illustrative purposes only and personalised advice and recommendations should be sought from a qualified professional. You are strongly advised to register a lasting power of attorney. This will allow your affairs to be managed by somebody else if your mental abilities significantly decline.

Types Of Equity Release Available

Lump Sum

Release a lump sum of money, dependant on age and equity in the property. You can choose to either service the debt or add the interest to the loan. Interest is compounded with the total debt and accrued interest being payable upon death or taken into long-term care.

Drawdown

Borrow a smaller initial sum, then agree an amount you can borrow in the future as needed. The interest rate is based (and charged) on the interest rate at the time of each drawdown.

Annuity

Choosing to purchase an annuity will give you a set amount each month that can be used to top up your income in retirement. However, this could affect any means-tested benefits you may receive and have additional tax implications.

Serviced

You can choose to service the monthly interest payments on the money that you borrow. This will mean that the amount repayable will only be what you borrowed, therefore, protecting the remaining equity in your property.

E.g. Borrow £50,000 at 5% = £2500/12 = £208.33 per month. At the end of year 1, you still owe £50,000. You can also make lump sum reductions to reduce the debt if the opportunity arises

Interest Rolled Up

No monthly payments on the money you borrow. The interest on the amount you borrow will be added to the loan. This is then compounded annually and added to the loan.

E.g. Borrow £50,000 at 5% = £2500 end of year 1 interest compounds and is added to the loan, Year 2 £52500 x 5% = £2626 + £52500 = £55125 and so on.

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