Latest news

How to Use a UK Equity Release Calculator

Compare Equity Release

Last updated on 27 June 2023

If you are a parent and looking for a way to secure a bright financial future for your children and grandchildren, you may have considered a lifetime mortgage. A great number of people struggle throughout their working lives to finance a property and make it into a home. However, during retirement when incomes become fixed, this home can sometimes become a financial burden, since your capital is tied up in the property until it is sold.

Equity release allows those aged fifty-five or over the opportunity to release a percentage of the equity from within their property, without the need to move home. For those people who are unsure whether equity release would be beneficial for them, a UK equity release calculator can provide information about the size of lump sum which would be available and the financial implications of committing to a plan.

Where to Make An Initial Enquiry

For a great number of people a UK equity release calculator can provide excellent information for their initial enquiries. It can confirm whether you would meet the qualification criteria and whether the maximum available sum would be sufficient for your requirements. Many people use the funds from their equity release to supplement financing their retirement, assisting their children or grandchildren to take their first step on to the property ladder or enhancing their quality of life. It can also be used as part of inheritance planning to avoid your beneficiaries paying higher premiums of inheritance tax. This can enable you to make an informed decision about whether you would like to proceed further in the process and speak to a specialist equity release adviser or lifetime mortgage broker.

What Information is Available?

There are a great number of formats for a UK equity release calculator. Some of these provide basic information such as the maximum possible lump sum; whereas others provide more in-depth information which is more tailored to your individual circumstances. Each calculator will ask for you to supply some personal information including the age of the applicants, details of any health issues, the current value of the property and the level of debt currently secured on the property. These factors will be collated by the calculator against the requirements of the equity release providers to provide a figure, interest examples and plan details which may be applicable for your circumstances.

How Are Equity Release Calculations Made?

There is a set of criteria which is common to most equity release schemes. Generally, an equity release will be based on the age of the applicant or in cases of joint applications, the age of the youngest applicant. Since the interest on lifetime mortgages is accrued and added to the balance of the loan, the longer the potential duration of the scheme, the smaller the percentage of equity release available. Most schemes are set with a minimum age of fifty-five for this reason with the level of available equity release increasing in increments with the age of the applicant. Obviously the value of the property and the level of debt currently secured against it will be a factor to assess the feasibility of an equity release scheme.

What are The Benefits of a Lifetime Mortgage Calculator?

Many people are hesitant about considering equity release. It can be a great benefit to use an online calculator and obtain some figures before discussing the possibilities with your children or grandchildren. It can also assist people to make the decision to seek out a professional equity release adviser for more information or to start the application process. Some of the more sophisticated calculators can also provide details of specific schemes which may be applicable, which can provide an excellent basis of comparison when speaking to a broker.

Summary

Equity release can provide an excellent method to provide a degree of financial freedom, especially for those who have found that their pension plan will not provide sufficient funds to sustain them in their retirement. Professional advisers will recommend speaking to your children and beneficiaries about the implications of equity release.

However, people find that they are able to obtain a lump sum or additional income through equity release and retain the right to live in their home until they either die or move into long term care. At this stage, the property is sold and once the balance of the loan has been settled, the beneficiaries are entitled to the remaining funds.

If you are worried about your financial future during retirement, a UK equity release calculator may be able to assist you to assess whether equity release could provide the solution to your requirements. This can then allow you to make an informed decision about whether or not to proceed further.

Call Freephone 0800 678 5169 if you require an equity release calculation performing for you. Alternatively, complete our equity release contact form to make your confidential enquiry.