We have been giving you updates based on the quarterly reports of Equity Release borrowing throughout 2017 and each one has shown growth from the previous quarter, but quarter 4 has shown that Equity Release is now at a 15-year high and the market appears not to have plateaued yet.
The Equity Release market has seen a total lending figure of over £3.06 billion in 2017, the first time the £3 billion mark has been exceeded in a single year. This is thanks to 67,000 homeowners aged 55 or over who have decided to unlock the equity in their property.
The market has grown so exponentially this year that Nationwide has now decided to tap into the market and has begun offering Equity Release.
Is Equity Release right for me?
If you’re over 55 and you are looking for some extra cash to take a holiday, treat the grandchildren or perhaps just to make life easier, Equity Release could be for you. It gives you access to a lump sum of money without the need to make repayments, unlike a regular mortgage. Instead, the money owed to the lender is paid from your estate when you pass away or move out of your home into long term care.
It is ESSENTIAL that you seek both legal and financial advice before you commit to Equity Release. Whilst it may seem on the face of it that Equity Release is ‘free-money’, the reality is far from it.
Many lenders charge compound interest on the money they lend, and this therefore allows the total sum owed to grow rather quickly. Whilst a lender will not lend more than can be paid from your estate, you may not be expecting the amount you borrow to accumulate so much interest and that’s a key reason as to why you should consult a professional. A further reason to consult a professional is that your entitlement to benefits can change due to being in receipt of a large sum of money.
For further positives and negatives, please read our previous blog here.
If Equity Release interests you but you don’t know where to start, please contact our Equity Release specialist Jane Elgar.