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Your property wealth may hold the key to repaying your existing mortgage
The average interest rate on a two-year fixed mortgage has risen to 6%. For a customer moving from a 2.24% rate secured in September 2020 – the average two-year fixed rate at the time – with a 25-year mortgage of £250,000, this will represent a £532 increase in monthly repayment.
So, if you have an interest-only mortgage reaching maturity, a fixed-rate deal about to expire, or are subject to your lender’s standard variable interest rate, you could be facing significantly higher costs to service your mortgage.
The recent financial shocks affecting the cost of living have had an almost universal impact. And the addition of significantly higher mortgage costs being added to rising energy, fuel and food bills could place unmanageable pressure on people’s income and savings.
That’s why now may be the right time to consider whether some of your property wealth could be the solution to help you repay your existing mortgage and keep a fulfilling and comfortable later life.
Property prices have continued to climb in recent years. And in 2022, homeowners aged 55 or over were reported to have a collective property wealth of £4.4trillion.
Through equity release, you may be able to unlock some of that value from your home in tax-free cash. By doing so, you could unlock the money you need to clear your existing mortgage and secure a more comfortable later life.
And if you choose to do so with a lifetime mortgage, the most popular form of equity release, you typically don’t have to make any monthly repayments. That means you could use equity release to repay your existing mortgage and free up more disposable income; allowing you to focus on what’s important to you in later life while knowing the bills are taken care of.
It’s not just clearing an existing mortgage and freeing up more disposable income as to why equity release is becoming an increasingly popular later life financial solution, however. There are many other reasons why it could be an option that meets your needs during these turbulent times.
Interest rates are fixed for life. And you’ll always own your own home. You can also relax safe in the knowledge that you can never owe more than your home’s worth, nor pass on any equity release debt to the beneficiaries of your will.
And if you do choose to unlock some of your property’s value to clear your existing mortgage, you certainly wouldn’t be alone, as in the first half of this year, 2 in 5 of our customers took out equity release to do just that.
But the need for expert equity release advice is crucial. At Key, we have more than 20 years’ experience providing over-55s with specialist advice. We've helped more than 1 million people decide if equity release is right for them.
Our equity release advisers will help you balance your current needs with your long-term plans, ensuring you’ve considered all your other options before going ahead.
You might be able to downsize your property to free up funds, use savings, or even borrow from friends or family. No matter what your needs, we’re here to ensure you make the decision that’s most suitable for your circumstances. And if equity release isn’t right for you, we’ll tell you.
We don’t charge anything for our initial advice. You only pay a fee if you choose to go ahead. That’s so you can explore equity release as an option with an expert equity release adviser without it costing you a penny.
If you’d like to find out more about equity release and see if it’s right for you, order your FREE guide by clicking here.
Or use our FREE online calculator here to see how much you could release today.
Equity release reduces your estate’s value and may affect your entitlement to means-tested benefits. Our equity release advice relates to Key-branded lifetime mortgages only - a loan secured against your home. With a lifetime mortgage, there are typically no monthly repayments to make, as the loan, plus roll-up interest, is repaid when the plan comes to an end. £1,299 fee only payable on completion.
So, if you have an interest-only mortgage reaching maturity, a fixed-rate deal about to expire, or are subject to your lender’s standard variable interest rate, you could be facing significantly higher costs to service your mortgage.
The big squeeze
The recent financial shocks affecting the cost of living have had an almost universal impact. And the addition of significantly higher mortgage costs being added to rising energy, fuel and food bills could place unmanageable pressure on people’s income and savings.
That’s why now may be the right time to consider whether some of your property wealth could be the solution to help you repay your existing mortgage and keep a fulfilling and comfortable later life.
Equity release could help you repay your mortgage now
Property prices have continued to climb in recent years. And in 2022, homeowners aged 55 or over were reported to have a collective property wealth of £4.4trillion.
Through equity release, you may be able to unlock some of that value from your home in tax-free cash. By doing so, you could unlock the money you need to clear your existing mortgage and secure a more comfortable later life.
And if you choose to do so with a lifetime mortgage, the most popular form of equity release, you typically don’t have to make any monthly repayments. That means you could use equity release to repay your existing mortgage and free up more disposable income; allowing you to focus on what’s important to you in later life while knowing the bills are taken care of.
Long-term security
It’s not just clearing an existing mortgage and freeing up more disposable income as to why equity release is becoming an increasingly popular later life financial solution, however. There are many other reasons why it could be an option that meets your needs during these turbulent times.
Interest rates are fixed for life. And you’ll always own your own home. You can also relax safe in the knowledge that you can never owe more than your home’s worth, nor pass on any equity release debt to the beneficiaries of your will.
And if you do choose to unlock some of your property’s value to clear your existing mortgage, you certainly wouldn’t be alone, as in the first half of this year, 2 in 5 of our customers took out equity release to do just that.
The importance of expert advice
But the need for expert equity release advice is crucial. At Key, we have more than 20 years’ experience providing over-55s with specialist advice. We've helped more than 1 million people decide if equity release is right for them.
Our equity release advisers will help you balance your current needs with your long-term plans, ensuring you’ve considered all your other options before going ahead.
You might be able to downsize your property to free up funds, use savings, or even borrow from friends or family. No matter what your needs, we’re here to ensure you make the decision that’s most suitable for your circumstances. And if equity release isn’t right for you, we’ll tell you.
We don’t charge anything for our initial advice. You only pay a fee if you choose to go ahead. That’s so you can explore equity release as an option with an expert equity release adviser without it costing you a penny.
If you’d like to find out more about equity release and see if it’s right for you, order your FREE guide by clicking here.
Or use our FREE online calculator here to see how much you could release today.
Equity release reduces your estate’s value and may affect your entitlement to means-tested benefits. Our equity release advice relates to Key-branded lifetime mortgages only - a loan secured against your home. With a lifetime mortgage, there are typically no monthly repayments to make, as the loan, plus roll-up interest, is repaid when the plan comes to an end. £1,299 fee only payable on completion.
Page last updated: Tuesday 16 April 2024