Equity Release: How Does it Work Based on My Age and Health?
You must be 55 or above to apply for an equity release mortgage. If you are a joint owner, the youngest must reach that age limit or transfer their equity to the older applicant.
Generally, you can borrow more as your age increases - the reality is that the lender's life expectancy calculations will make it more likely that they will sell the property sooner.
Hence, it's a reduced risk to them.
Health and lifestyle are critical metrics in the life expectancy assessment.
If you have particular health conditions, you may be offered a higher percentage of your equity.
There are over 100 applicable conditions and more than we can list here, but the Revolution Broker team can help if you'd like a confidential chat.
How Do Equity Release Advisers Calculate What I Can Borrow?
Regulated and registered equity release lenders adhere to the guidelines set by the Equity Release Council.
Those rules limit the maximum proportion of capital you can apply for through an equity release product, and lenders may also stipulate a minimum loan value they will consider.
Part of this is the guarantee of no negative equity, which means that no matter what you borrow and how long you live in the property, the lender cannot impose a debt collection order on your beneficiaries to collect more on the loan than the property is worth.
Lenders tend to go for a maximum 50% cap to have some risk limitation, so there isn't much likelihood that rolled up interest will create a higher loan balance than they can recoup.
Most providers will offer between 20% and 50% as an equity release loan proportionate to your property value.
The Best Equity Release Loan to Value Based on Property Price
Although equity release LTVs will depend somewhat on the lender, we have compiled the below table to give you a rough idea about how much you might be able to borrow based on your age and the value of your home.
Note that this is purely an illustration, and other factors such as your health, the nature of the property and the construction materials used will also impact the maximum LTV assessment process.
|
Applicant Age
|
£150,000 property
|
£200,000 property
|
£250,000 property
|
£300,000 property
|
£350,000 property
|
£400,000 property
|
|
55
|
£31,500
|
£42,000
|
£52,500
|
£63,000
|
£73,500
|
£84,000
|
|
60
|
£37,500
|
£50,000
|
£62,500
|
£75,000
|
£87,500
|
£100,000
|
|
65
|
£46,500
|
£62,000
|
£77,500
|
£93,000
|
£108,500
|
£124,000
|
|
70
|
£54,000
|
£72,000
|
£90,000
|
£108,000
|
£126,000
|
£144,000
|
|
75
|
£61,500
|
£82,000
|
£102,500
|
£123,000
|
£143,500
|
£164,000
|
|
80
|
£63,000
|
£84,000
|
£105,000
|
£126,000
|
£147,000
|
£168,000
|
Equity Release Support From the Independent Equity Release Advisers
Please contact the whole-of-market equity release team at Revolution Finance Brokers for more information about any aspects we have discussed here.
It is essential to receive independent guidance before taking on a long-term financial commitment, and multiple variables affect the most appropriate lender and product we might recommend.
