Usually, the rate of interest for equity release is fixed for life.
Therefore, if you decide to let the interest roll-up, you can accurately forecast the sum owed throughout the term on a year by year basis.
You will receive annual statements that show the sum owed to the lender.
However, many of our clients prefer to meet all, or a portion of, the interest payments to avoid any roll up of outstanding debt.
You are currently allowed to make overpayments, in excess of the fixed interest rate, up to 12% of the outstanding balance each year without any charge.
All recommended plans, which are approved by the Equity Release Council, provide a ‘no negative equity guarantee’.
This means that when your property is sold at market value, on the death of last survivor, if the proceeds are not enough to pay the amount due, lenders will not ask you or your beneficiaries to repay the shortfall.
There is no charge for this guarantee.
This article has provided a brief insight into lifetime mortgages.
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