s Should I explore freeing up equity when the 2-year fixed rate deal expires (on a 15-year repayment mortgage)? I turn 60 next year and plan to work until I’m 67. I have a number of decent local authorities and private pensions, as well as £40,000 in additional voluntary contributions, which should cover any mortgage payments after retirement.
My property will be on the market at around £300,000 and my mortgage outstanding is £150,000 (but maybe £130,000 when the fixed rate expires). I bought last year at the height of the market.
I have no children and no one I want to leave behind after my death. So I have little ambition to pay off the mortgage (although I’ll use AVCs for that).
The important thing for me is the low monthly payments. Should I look at stock release, or am I too young?
a No, you are not too young to consider equity release, as the minimum age is 55, but you are too young to raise the £130,000 you would need to pay off your existing mortgage. When you reach 60, the maximum amount of capital you can release is 39.2% of your property value, according to Andy Vickery, a qualified equity release and mortgage advisor at Money Release who specializes in financing over 55s — which means you can get The maximum benefit is £117,600. If you wait until you are 62, the maximum you can free up is £123,900, a little higher.
The main advantage of freeing up capital for you is that instead of lower monthly payments, you will not have any monthly payments. This is because the interest charged on the loan is added to the amount you originally borrowed, so the amount you owe increases each year, and so does the interest charged. Since you don’t want to leave your property to anyone, that’s not really the problem, it might be for someone who wants their heirs to inherit as much of the property’s value as possible.