You do not borrow against the value of your home but are actually selling part of your home and as such, you do not have to make any repayments. Firms providing these products must meet the conditions of consumer credit law. For example, if your home is worth €400,000 and your mortgage is €100,000, then you have equity in your property of €300,000. An equity release calculator is a tool you can use to work out how much tax-free cash you can free up from your property. But bear in mind that the interest you are charged is based on the amount you borrow. This can be a good idea, because the interest can grow on these loans quickly, and can eat up the value of your home. It is not a loan so there are no repayments and you are not charged interest. Equity release schemes were designed for homeowners aged 55 and over who wanted to release some equity from their property. However, you may be charged a fee for each instalment you take, so you need to take this into account. You continue to be the legal owner of your property. Access our free guide on each equity release scheme available. You could lose some or all of your investment and any return you make on your investment is likely to be less than the cost of the equity release scheme. This means that you (or your estate) will never have to pay more than the proceeds of your home when it is sold, even if the amount of your mortgage is more. Understand the pros and cons to each type of release plan. Due to different life expectancies, a single man of the same age would receive more money than a single woman, as he is expected to live for a shorter time. An equity release scheme can provide a cash lump sum that can be used immediately or can be put toward supplementing existing income, such as pension income during retirement. You won’t benefit from the full increase in the value of your home if property prices rise. From 1 June 2008, all firms in Ireland that provide lifetime mortgages or home reversion schemes must meet the conditions of the Central Bank’s Consumer Protection Code and must tell you about the costs and risks of taking out an equity release product. For example, if you first sold 25% of your home, after 15 years the home reversion company might own as much as 50%. What are my rights if I have a complaint against the company? If property prices fall, you will benefit from having received a cash value based on prices before the fall. There may be an additional charge for taking the money out in instalments. The table below shows the lump sum a single woman could get for selling a 50% share in her house worth €500,000 under a fixed-share contact. For most lifetime mortgages on the market you must be at least 55 to be considered, while for most home reversion plans you must be at least 65. There are two equity release options: Lifetime mortgage: you take out a mortgage secured on your property provided it is your main residence, while retaining ownership. How will my decision affect my beneficiaries? ⚠️(Spoiler**) Most send us a personal thank you because we do such an incredible job – you’ve been warned. Require monthly interest only repayments. Lines are open Monday to Friday, 9am to 5pm (excluding bank holidays). Also bear in mind that some schemes may prevent you from making certain renovations to your home, as your provider may consider that they reduce the value of your home. We operate across Northern Ireland. You may also find our information on making a complaint useful. You have a choice between a fixed share and variable share contract. It is a way to raise cash, but it is expensive. Understand Equity Release Schemes. The Equity Release Council also promotes the safe guidance of these products. There are two main types of equity release schemes: lifetime mortgages and home reversions. The longer a roll-up mortgage lasts, the more money you will owe. One reason you may be considering equity release is to pay for nursing home care. These are: One of the conditions of getting a lifetime mortgage is that you have to pay off any existing mortgage on your home. Therefore, the percentage of your property that you own will reduce as time goes on. Under a fixed-share contract, the home reversion company pays you a lump sum in return for a fixed share of your home. With a roll-up mortgage, interest builds up quickly as you make no repayments. Interest is charged on the money you borrow and added to the original loan amount. You could release equity up to €120,000 (up to 90% of the value of your property) With Equity Release you can. Yes, Calculate My Equity Release Now! Competition and Consumer Protection Commission, Bloom House, Railway Street, Dublin 1, D01 C576, What we do with information we take during a search, Financial Services and Pensions Ombudsman, Small self-administered pension schemes (SSAPs). With home reversion schemes, you sell a share of your home in return for a set price, which is usually much less than the actual market value of the share of your home. Section 47 of the Consumer Credit Act 1995 states that. A small number of firms offer equity release schemes. Your debt will also be larger than it needs to be. You will only benefit from any increase in the value of the share you still own. However, if you pay fees through your lifetime mortgage, you will pay interest on them, meaning they will cost you more in the long run. Interest rate increases will also affect a variable rate interest-only mortgage, as your monthly repayment could increase and you may find it difficult to meet the repayments. The other 50% would go to you or in the case of your death, to your estate. Compare Exclusive Product Deals. One key aspect of lifetime mortgages is that they allow you to maintain 100% ownership of the property. So it is important to make sure the valuation is independent – you may also want to get a second valuation yourself, a fee for the independent legal and financial advice you need to protect your interests, insure your home, noting the lender’s or home reversion company’s interest in the policy, You move out of your home for six months or more (unless your mortgage is in joint names and the other owner is still living there), You don’t look after your home to the standard that has been set by your lender to maintain its value. You don’t need to have fully paid off your mortgage to do this. The "catch" is that the income-provider must be repaid at a later stage, usually when the homeowner dies. For example, the Equity Release council ensures that you have permanence of residence while using one of these schemes and provides a no negative equity guarantee for those who are concerned with protecting loved ones. Equity release in Ireland is, in a nutshell, a mode of unlocking the value of your property in Ireland and turning it into a lump sum. Providers and advisors must also meet the requirements of the Central Bank’s. However, you may be able to negotiate with the home reversion company to buy back the share you sold them and you can usually sell your home on the open market by coming to agreement with the home reversion company. No. So, the longer you live, the less of your property you will own. You move out of your home permanently, for example if you move into long-term care or, you move out of your home permanently, for example if you move into long-term care or, selling your home and using the money to pay off your loan or, using any other money you have to pay off the loan. Choosing an equity release scheme is not something you should enter into lightly. Where to find a regulated and qualified financial adviser with relevant experience, How do I make a complaint about a financial adviser, Estimated lump sum a reversion company will pay for 50% share. Learn Your Maximum Equity Release. If this is the case, you may also want to consider the Health Service Executive Nursing Home Support Scheme, which allows you to receive state benefit which you repay when your estate is settled. There will probably be an upper and lower limit on the amount you can borrow and there may be a minimum property value. You may need to put aside between €1,500 and €3,000 to cover these costs. For example, there are currently only two lenders that will consider Northern Ireland, while other lenders insist that the property is situated on the mainland, which excludes certain islands. For more information on this scheme, contact the Department of Health or the Health Service Executive. The loan is then paid back at a later date during your lifetime, or when the homeowner dies. An equity release plan will reduce the value of your estate, so telling your family about your plans will avoid any nasty surprises further down the line. How will the money I get affect my pension or entitlement to other state benefits? Before you make any decision about an equity release scheme, make sure you get independent legal advice from your solicitor. These policing entities oversee the rules of equity release schemes and the lenders who provide them. Interest rates on lifetime mortgages are usually 2% to 3% higher than standard mortgage rates. More details here. So here’s the scoop – our intention is to help you by finding the best equity release provider so that you can spend the money on something that you really want to, rather than on a high tax bill. RIO Mortgages continue into retirement based on income and affordability. Yes. You can choose to ring fence some of the equity in your property to ensure you have an inheritance to leave to family members. If you have a lifetime mortgage, repair costs will be added to the amount you owe, so interest would be charged on those costs. Companies who offer home reversion schemes will usually consider buying up to 70% of your home, depending on your age and the value of your home. The table below shows how much a roll-up mortgage would grow after 15, 20 and 25 years. Equity release schemes are becoming an even more popular tool in retirement planning. Equity release is continuing to increase in popularity, with an increasing number of deals allowing borrowers to opt for a regular monthly income rather than a cash lump sum. don’t want to sell your home and live elsewhere and, are not concerned about passing on the value of your home to your family or other beneficiaries on your death, selling your home and moving to a cheaper or smaller one, transferring ownership to a family member in return for the cash you need and the right to live in the property for life. Some lifetime mortgages must be repaid within 30 years of you borrowing the money. Equity release reduces the value of your estate and the amount that will go to the people named as beneficiaries in your will. Equity release schemes are becoming more and more common, as clients wish to release the value of their properties – while still residing in them - in order to cover other costs. Get our most competitive rates. You basically receive your cash sum payment and you don’t make any payments. If interest rates rise, the interest you owe on a variable-rate roll-up mortgage will increase, and so will your total loan. Please visit the Consumer Information & FAQ section of this website. Interest-only mortgage: You can usually borrow from €30,000 up to a maximum of 30% of the value of your home. The money will be paid to you as a lump-sum. The terms of your agreement may allow your lender to insist that your home is sold and the mortgage paid off if: If you have a complaint about a lifetime mortgage or home reversion scheme, and you are not satisfied with the way your complaint is handled, you can refer the problem to the Financial Services and Pensions Ombudsman. If you take the money in smaller amounts, you will only be charged interest on the amount you have taken. Also, consider the benefits of making a will before entering one of the schemes as this will avoid delays in sorting out your affairs after your death. You get much less than the market value of the share you sell. You can raise cash by selling part of your home and can continue to live in it. Choose a term that suits you best, from 5-30 years (to maximum age 70). p. Where can I get guidance? If you own your home and are over 55, an equity release scheme could allow you to release some of the value of your home without having to make repayments during your lifetime, move out or sell your home on the open market. If someone who relies on me financially lives with me, could they continue to live in my home if I move out or die? Once you know how each type functions, you’ll be in a better position to know which suits your needs best. We operate to the highest standards These equity release schemes in reality were credit arrangements (ignoring any other label placed on them by a financial institution) and the fact that they were offered by now wholly or partly owned State financial institutions should not give that institution carte blanche to charge excessively for these ill fated products. These two new recovery schemes are part of a range of solutions we are putting in place to help businesses progress recovery plans, strengthen supply chains, develop new products and … It’s also the lenders decision if they want to lend depending on where you live. Can the scheme be transferred to another property if I want to sell up and move later on? If you take more than you need and leave it in a low-interest account you could end up paying more in interest on the money you borrowed than you earn in a deposit account. You get the financial freedom offered by a lump sum or regular payments, or both. Equity release: how expats can make money from their home. Equity release is, in a nutshell, a way to unlock the value of your property and turn it into a cash lump sum. However you will have to make repayments: The repayments might seem manageable. There are both advantages and disadvantages to using an equity release scheme. The lender or home reversion company can inspect your home from time to time and they can carry out repairs that you must pay for if you don’t maintain your home to their standard. There are a number of variations, such as the interest-only repayment, that exist with lifetime mortgages. Different Types of Equity Release Schemes. Answer: Equity release schemes are currently not available in Ireland. Have an unanswered question or want more information on equity release? Pros and Cons of Equity Release In 2020. Equity release products allow you to unlock some of the equity from your home in return for a cash lump sum, without you having to sell up. You can get a list of law firms from the Law Society. So, the older you are when you sell a share in your home, the more money you will get. Given their popularity, equity release schemes have grown very flexible, with a number of unique features attached to them in an effort to make retirement planning easier. You’re protected . From 1 June 2008, all firms in Ireland that provide lifetime mortgages or home reversion schemes must meet the conditions of the Central Bank’s Consumer Protection Code and must tell you about the costs and risks of taking out an equity release product. Why 55 Plus Equity Release We’re dedicated equity release experts. Equity release schemes are not suitable for everyone, but they may be worth considering if you need to raise a lump sum, or you need a regular income for your retirement and you: Don’t be tempted to use an equity release scheme to raise money for investments that may be risky. Roll-up mortgage: You can usually borrow between 15% and 45% of your home’s value. Our experienced team at Donnelly & Kinder in Belfast can guide you through the process. Your estate is everything you own, including money, property, possessions and investments. Standard, enhanced and interest only figures provided. And should I discuss it with them first? You can call the Saga Equity Release Advice Service on 0800 096 7120. If you are considering an equity release scheme, get independent legal and financial advice first and consider the alternatives, including: Before you make any decision about an equity release scheme, make sure you get independent legal advice from your solicitor. Contact Us! You cannot change or reverse this kind of contract because you have actually sold part of your home. Law firms from the proceeds when your home gets older lender or home reversion company all. Nursing home care FAQ section of this product percentage of your home you still.! 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