Can I Get Equity Release if I am Under 55 Years Old?
Typically, you are required to be over 55 for an equity release mortgage, since the minimum age for lifetime mortgages is 55 and for home reversions it is 60.
This is because equity release is designed to provide extra money for retirement purposes and also to manage your risk since the longer you use equity release, the more expensive it can be.
So if you are under 55 and looking to take out an equity release plan, you could potentially live for another 20, 30, 40 years or more and by this time, you would have paid a lot of interest to the equity release provider and this could exceed the value of your home.
However, help is at hand. Lending Expert works with some of the UK’s best mortgage and equity release companies to find an effective and affordable solution for you.
If you are looking for equity release under 55, there are a number of options available and you can still release equity from your home, whilst maintaining value in your home and putting aside money for your children’s inheritance.
What Equity Release Options Are There For People Under 55?
Secured Loans – If you have a mortgage and a property that you own, you can apply for a secured loan. This means that the loan is secured against your home and you can borrow based on the value of the property and how much equity you have in it. With secured loans, you can borrow as little as £500 to £250,000 and this is often classed as a second charge loan or a second mortgage.
With competitive rates starting from 3.34% APRC, this can be an effective way to borrow over a period of 1 to 35 years, with the option to repay early at any time. One important note is that the lender may be able to repossess your property if you are unable to keep up with repayments long-term.
Remortgage to Release Equity – This is probably the closest thing to getting equity release under 55 years of age. If you have paid off a lot of your existing mortgage or you have been moved to the standard variable rate (SVR), this is a good opportunity to remortgage under different terms.
When you remortgage, you will be able to get different rates, terms and loans-to-value based on factors such as your income, credit status, payment history and value of your property.
When remortgaging to release equity, you can choose to release a lump sum from your home when the new deal is arranged.
This can be very effective, since you are able to access money upfront (like you would with equity release), but without giving up any equity in your home and your mortgage repayments are adjusted accordingly.
You will just need to check how far along you are with your existing mortgage plan, since leaving too early could incur early repayment charges.
What if I am Under 55 But My Partner Is Not?
If you are under 55 years of age, but your partner is older, it will be possible for them to take out an equity release mortgage. You will just need to transfer your equity in the property to this individual in order to proceed.
Does My Age Impact How Much Equity I Can Release?
Yes, typically the older you are, the more equity you can release. This is because hypothetically the lender is closer to recovering their return on investment.
Other factors include your current medical conditions, the value of your property and affordability.
What Can Equity Release Be Used For?
Equity release is typically used by people over the age of 55 to help fund their retirement or provide additional cash for things like home improvements, debt consolidation or for gifting money to their children.
Equity release exists in two forms, a lifetime mortgage where you can draw down 20% to 60% of your home’s value, but continue to live in the home until you die or go into long-term care, whilst still retaining full ownership. The other form is home reversion where you physically sell off a stake in your home and the lender recovers this when you die or go into care.
Speak to Lending Expert For:
- Equity release under 55
- Equity release under 50
- Equity release under 45
What To Consider When Applying for Equity Release When You Are Under 55
Equity release can be extremely effective for seniors or homeowners who have a lot of money tied up in their home. The money you can release is tax-free and can be distributed in one lump sum or you can draw it down in stages and only pay interest on what you use.
The drawbacks of equity release is that you are charged interest by the lender each month and this can slowly start to add up if you live for another 20, 30 or even 50 years, which is a good possibility if you are only 55 years old.
Ideally, you want to retain full ownership of your property and benefit if it increases in value, so you can sell it one day for another injection of cash or pass it onto your children as inheritance. But if you are tied into equity release for too long, you risk the interest charges eating away at the value of your home and eventually there may be little value or no value left at all.
So overall, equity release can be very useful to fund your lifestyle and top up your pension. But there are over 100 types of plans available and it is important that you speak to a professional like Lending Expert to find the right plan for you.
You may wish to maintain the value of your home or put money aside for inheritance and this is all possible. Make sure that you understand all the terms of your agreement will ensure that your equity release plan is a success.