Can I pay off my existing mortgage with equity release?
With more people now discovering that their retirement will be longer and more expensive than they’d originally anticipated, many are looking at ways to make their home work harder for them without needing to sell up and move.
One of the options that you could explore as a way to pay off your mortgage in retirement is by using some of the equity that has built up in your property over the years with an equity release plan.
A lifetime mortgage is the most popular form of equity release. Available to homeowners aged 55 and above, with a lifetime mortgage there are typically no monthly repayments as the loan, plus roll up interest, is repaid when the plan comes to an end.
Although people choose to release equity for a variety of reasons, by using a lifetime mortgage to clear an existing mortgage, homeowners could reduce their monthly outgoings and use their income to help fund a more comfortable retirement.
Downsizing vs equity release
In the past, many felt the only way to access the value from their home was by downsizing. However, aside from the costs that come with downsizing such as conveyancing, surveys, solicitors and moving fees, there are also the obvious emotional repercussions of leaving a home you love to consider. With a lifetime mortgage, the most popular form of equity release, you could release up to 55% of the value of your property while staying in the home you love and remaining the home owner. It’s proved a timely solution for some retirees who find themselves cash poor, whilst living in an asset worth hundreds of thousands of pounds.