Rookery farm
Mile Hill
Porthtowan
TR4 8TY

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A further way of releasing some of the equity value of your home is through an Interest Only Mortgage, producing a lump sum to do with as you please. However, since the mortgage must remain affordable throughout its term and since income in retirement is often limited, these plans may be restricted for some people to a sum of £30000 or a little more. The Capital is repaid from the sale proceeds or from the estate on death. The good news is that a small mortgage will quite possibly increase you Pension Credit entitlement, which means that the State might pay the interest.

Entering into an Intererest Only Mortgage Plan has long term implications for both you and your beneficiaries and you should not proceed lightly with any form of releasing cash from the equity in your home, without taking independent financial and legal professional advice. You should also consider the other alternatives, such as downsizing, sale and rent and other forms of equity release. If you fail to do so and make a mistake it may be difficult and expensive, if not  impossible, to rectify it and there are often better solutions available.

Equity Release CHoices.....The Interest Only Mortgage

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Advantages

The amount you owe is fixed so any increase in the value of your home belongs to you or your family.

You can borrow at a fixed rate so you know exactly what you have to pay every month.

You can borrow from retirement age onwards.

Disadvantages

You need to be able to afford the ongoing interest payments: you might need to think about investing the lump sum you borrow.

Many schemes involve buying an annuity. Because annuity rates are so low and they increase with age, these schemes are often only suitable for elderly homeowners.

Variable rate loans can be very risky: your payments could rise more than your pension or other income.

Several lenders, including Banks, are prepared to consider setting up such an arrangement and any independent mortgage broker will be able to point you in the right direction if you need help. If you don't know one, I will happily put you in touch with one local to you.

The Mortgage Shop is a retired IFA that no longer gives direct advice on or arranges Equity Release. Instead, it passes your enquiry to a fully qualified and licensed professional firm in your local area that will do this for you. This is a FREE referral; service to you, without any obligation, and you are completely at liberty to negotiate with the firm concerned the terms for their advice and services. The information provided is on the basis of our understanding of UK tax law and Inland Revenue practice and is subject to change.  This site is intended for persons aged 18 or over, resident or ordinarily resident, in the United Kingdom. email: bobstark@mortgagefor.me.uk

This is about Equity Release Plans. To understand the features and risks, ask for a personalised illustration. The actual APR rate available will depend upon your circumstances.

I recently succesfully challenged a DWP statement that a married couple were not entitled to  Pension Credits. As a result, their income was increased by almost £175 per month

The Mortgage Shop will be pleased to discuss your objectives and to put you in touch with an approved local specialist firm that arranges equity release.

Before you start spending your pension, first use the link above to check that you are receiving any and all Pension Credits you are entitled to.