Paying off your existing mortgage

Can I pay off my existing mortgage with equity release?

One of the options that you could explore as a way to pay off your outstanding mortgage balance in retirement is by using some of the equity that has built up in your property over the years with an equity release plan.

Clearing your existing mortgage balance when you’re in or approaching retirement can not only be a welcome relief, but can also free up some of your monthly income to spend on some of the things you would really want and may need for later life

Although people choose to release equity for a variety of reasons, by using a lifetime mortgage (which is a type of equity release plan) to clear an existing mortgage, homeowners could reduce their monthly outgoings and use their additional 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, which is a loan secured against your home, 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 thousands of pounds. However, you should always think carefully before securing a loan against your home to repay existing debt.

Things to consider

• All our equity release advice relates to Key lifetime mortgages only - a loan secured against your home
• The loan, plus compound interest, is typically repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care
• Our fixed advice fee of £1,299 is only payable on completion

Is equity release right for you?

Equity release is a way for homeowners aged 55 and over with a property worth £70,000+ to release some of the tax-free cash from their property to spend on a variety of uses. However, it’s not right for everyone.  

At Key, our specialist equity release advisers will discuss your needs and ensure you consider all your financial options, and their expert advice is available over the phone, via video appointment or face-to-face, whichever is right for you.
 
And, if equity release isn’t right for you, we’ll tell you.