Can equity release mortgages reshape society?

Monday, 1st February, 2021
equity release mortgages

Admittedly, this sounds like the type of question you might expect to find in a journal (or, at the very least, a trade media title). However, as an equity release mortgage specialist and Guildford mortgage broker, we believe that the answer is ‘yes’ – and here’s why.

For a whole host of reasons, many of which are generational (and not all of which can be blamed on the current global situation), young people are finding it increasingly tough to get a first time buyer mortgage.

This might be related to a reduction in available first time buyer mortgage deals. Or, it might be simple economics, whereby demand has pushed up the price of property, thus decreasing the ‘real’ value of a deposit that someone may have taken years to save and leaving homeownership out of reach. Regardless of the cause, it’s really not that easy for the next generation of homeowners.

And this is where equity release mortgage deals are making a big difference.

See, many of those aged 55 and over (the pre-requisite for equity release) are at the opposite end of the spectrum. They made money – sometimes a lot of money – on their property. More often than not, it was by pure luck and in no way the result of any shrewd business decisions. Property simply went up, and up and up.

But now, as they find themselves either financially secure or in the latter stages of their life, equity release – the process of freeing up wealth currently tied up in bricks and mortar – is becoming a way in which to help their children, and even grandchildren, get that foot on the property ladder.

We’re all aware of the term ‘bank of mum and dad’, but now the ‘bank of grandma and granddad’ is also becoming more commonplace, too.

Age Partnership has reported an increase in equity release as a way in which for those of a certain age to provide their loved ones with early inheritance gifts. Maybe last year’s equity release boom was to help family members buy a property before the stamp duty holiday ends this spring. Either way, it seems as though equity release mortgages are becoming a balancer – a way for the older generation to move wealth down a generation or two in order to give younger family members the same opportunities they once had.

In any case, equity release mortgages are becoming more popular. Given the struggles the youth of today face, it’s not hard to see why.

Are you 55 and over and thinking of applying for an equity release mortgage? If so, contact the Complete Mortgages team today on 01483 238280 or email info@complete-mortgages.co.uk. Similarly, if you’re the recipient of an equity release inheritance gift and are looking to apply for a first time buyer mortgage, get in touch.

By Mark Finnegan, Equity Release Adviser at Complete Mortgages


Putting the ‘ease’ in Equity Release mortgages

Thursday, 31st October, 2019

There are numerous reasons why aging homeowners would want to release property wealth.

Whether it’s to boost the pension pot, help your children (or grandchildren) afford their first home or simply free up some money to buy that dream car you’ve always wanted, equity release mortgages have come to represent a viable route in which homeowners can convert bricks and mortar into ready cash.

Furthermore, thanks to the proliferation of equity release mortgage deals over the last few years, it’s also an easy and cost efficient route, too.

According to the Equity Release Council – a trade body that represents the equity release mortgage sector and promotes high standards of conduct and practice in the provision of and advice on equity release – a staggering £1.85billion in housing wealth was released in the first half of 2019.

And this growing popularity is also helping to drive down equity release mortgage rates, too, with some lifetime mortgage rates coming in at under 3 per cent. In summary, going down the equity release route is now a very easy process to carry out.

If you’re about to apply for an equity release mortgage and would like to know more about how they work, then read our guide to equity release mortgages. Similarly, read the top tips on equity release mortgages to get Complete Mortgages’ take on what you should be considering before you start the process.

However, as easy as it is to get an equity release mortgage, there are a few things to consider:

1. Borrow in stages

Regardless of the amount you agree to free up via equity release, don’t take it all in one go (if you can help it). After all, as soon as you borrow, interest – and the effects of compound interest – quickly begins to have an effect. If you think £20,000 can cover you for 10 years, just take that and wait before taking the next sum. There’s little point paying interest on money you don’t need.

2. Quality counts

As mentioned previously, the Equity Release Council exists to promote high standards and uphold quality. So, make sure that when it comes to applying for equity release, you use a company that is a member of the Equity Release Council.

3.  For your benefit…

Check your benefits status. If you’re entitled to – or currently receiving – benefits, a significant injection of cash (which is treated very differently to equity locked in a property) may change your benefits status. In fact, it could result in the reduction, or even the complete stoppage, of your benefits.

4Get good mortgage advice

A good mortgage broker in Guildford, such as Complete Mortgages, will be able to help you make the right choice when it comes to equity release. There is a lot to consider when it comes to this type of mortgage, so speaking with an expert is an absolute essential from our perspective.

As an equity release mortgage specialist, let Complete Mortgages help you decide if equity release is the best way forward for you. Contact the team on 01483 238280 or email info@complete-motgages.co.uk.


Six top tips on equity release mortgages

Wednesday, 20th March, 2019
Equity Release Mortgages

If you’re considering going down the equity release mortgage route, then you’re probably aware of the overall concept behind them, how they work and the benefits of releasing equity from your home – particularly if you’re 55 years old and above and looking to free up capital.

If that’s not the case, then read our ‘Are equity release mortgages good or bad?’ article, which provides a quick and easy guide to equity release.

However, if you are further down the line and are now thinking about the wider implications, then these six tips may be of interest.

1. Consider the alternatives

Equity release mortgages are effective and their growing popularity reflects this, however it’s always good to know your options. When it comes to alternatives, then the most cost effective way of raising capital is to downsize. However, if space is important to you and you want to stay in your home and have more money at your disposal, then applying for an equity release mortgage could be a more suitable route.

2. Keep your family in the loop

Equity release is a big decision and one with a number of potential repercussions for children and family members later on down the line. Our advice, when it comes to equity release mortgages, is to make your intentions clear to all those who may be affected by an equity release contract in the future.

3. Big decisions require good mortgage brokers

As a Guildford mortgage broker, we’ve seen – and helped people through – the effects of poor equity release decisions made on the back of bad advice. Getting an equity release mortgage is a significant decision and one that needs to be backed up by sound advice. Make sure that choosing a good mortgage broker is on your list of priorities before committing yourself to anything.

4. Know the numbers

Fees and compound interest form part of equity release mortgage deals. It’s no different from any other mortgage agreement in that regard, however this may have more implications on those who, as they get older, are likely to work and earn less. Know where you stand and how much it’s going to cost you before you sign the paperwork.

5. Equity release is convenient…

…but it can also be an expensive way to borrow. If, after getting good advice from a mortgage broker, you decide to apply for an equity release mortgage, then make sure you don’t take out more than you need, as any excess money will be accruing interest up until the point that your property is sold.

6. Lowest isn’t always the best

Choosing a mortgage with the lowest possible rate is pretty much a priority for everyone. However, when it comes to equity release, lowest isn’t necessarily the best. Equity release mortgage deals often include special features, such as offering the borrower the ability to make monthly repayments to avoid interest rolling up. Whilst the premium for this may be a slightly higher interest rate, it may work out more beneficial on a long-term basis and provide a greater degree of flexibility.

Still unsure about equity release mortgages? Contact one of our equity release mortgage specialists on 01483 238280 or email info@complete-mortgages.co.uk to find out more. Remember, we’re not just specialists in equity release mortgages but also first time buyer mortgages, buy to let mortgages and commercial mortgages, too.

By Mark Lucas, Equity Release Specialist at Complete Mortgages