Enhanced Equity Release
Find out how much extra equity you could access with an enhanced lifetime mortgage. Health issues or lifestyle choices might qualify you for a higher cash release or improved interest rates.
What is Enhanced Equity Release?
Typically, health conditions or lifestyle choices don’t offer financial advantages. However, with enhanced lifetime mortgages, your unique circumstances are recognised.
By disclosing your medical history, you might be able to unlock more money from your home.
These mortgages offer higher cash releases or lower interest rates if you have certain health conditions or lifestyle factors.
How Do Enhanced Lifetime Mortgages Work?
Enhanced lifetime mortgages can help you unlock a more significant percentage of your home’s value and offer additional benefits.
Lenders assume borrowers with certain health conditions may have a shorter lifespan, meaning the loan might not last as long as it would for someone without these conditions.
Depending on the severity of your health issues, you might be able to:
- Unlock more equity from your home
- Qualify for a lower interest rate
- Access a larger drawdown facility, allowing you to get more money in the future
You can stay in your home until you pass away or move into long-term care. Then, your home will be sold, and the loan plus interest will be repaid.
Any remaining money from the sale will go to your beneficiaries according to your will.
Which Conditions Qualify?
Several conditions might qualify you for an enhanced lifetime mortgage. For joint plans, lenders consider the health and lifestyle of the youngest borrower.
Common qualifying factors for people over 55 include:
- High blood pressure
- Diabetes
- High or very low body mass index (BMI)
- History of smoking
- Parkinson’s disease
- Multiple sclerosis
- History of heart attacks, angina, or strokes
- History of certain types of cancer
- Being on prescription medication
During an appointment with a qualified equity release adviser, you and your partner (if applying jointly) will answer a few questions about your medical history and lifestyle.
The adviser can tell you if you qualify for an enhanced equity release plan based on your answers.
Am I Eligible?
You need a qualifying medical condition or lifestyle factor to qualify for an enhanced equity release plan. Your equity release adviser will also check several other criteria to determine eligibility.
While criteria can vary between lenders, typical requirements include:
- You must be aged 55 or over and a UK resident.
- For joint applications, the youngest applicant on the property deeds must be at least 55 years old.
- You must own your home in the UK, which typically should have a minimum value of £70,000.
How Much More Can I Borrow?
The amount you can borrow with an enhanced lifetime mortgage depends on your unique circumstances. Lenders consider the number and severity of your medical conditions and lifestyle factors like smoking.
Other factors that influence how much you can release include:
- The location and value of your property
- The amount of equity you have in your home
- Your age, or the age of the youngest homeowner in a joint plan
Generally, the older you are, the more you can borrow, with typical amounts ranging from 25% to 60% of the property’s value.
Lenders also have minimum loan amounts, usually starting from £10,000.
Can You Get Medically Enhanced Home Reversion?
Yes, it is possible to get medically enhanced home reversion plans.
Similar to enhanced lifetime mortgages, medically enhanced home reversion plans take your health and lifestyle factors into account to potentially offer you more favourable terms.
Basically, the older you are, or the lower your life expectancy, the more likely the provider will get their money back sooner.
Protection and Guarantees
Equity release is regulated by the Financial Conduct Authority (FCA), ensuring certain standards are met. Advisors must consider alternative funding options for clients.
Additionally, the Equity Release Council, the industry’s regulatory body, mandates certain guarantees for member providers:
- No Negative Equity Guarantee: You or your family won’t owe more than your property’s value to the lender.
- Lifetime Home Occupancy: You have the right to stay in your home for life.
- Flexibility to Sell: You can sell your home and move without penalties.
- Penalty-Free Partial Repayments: You can make partial repayments without penalties.
- Fixed or Capped Interest Rates: Your interest rates remain fixed for life or capped at a maximum level.
Alternatives to lifetime mortgages
While a lifetime mortgage can provide a welcome cash injection, it’s not the right choice for everyone.
Alternative options worth considering include tapping into your savings, selling assets, accessing grants, checking your entitlement to benefits, remortgaging, or considering Retirement Interest-Only (RIO) mortgages. Other possibilities include downsizing to a smaller home, seeking support from family and friends, or renting out a spare room.
Each option has pros and cons, so weighing them carefully to find the best fit for your financial situation and lifestyle is essential.
Can you switch equity release?
If you’re already engaged with a lifetime mortgage, exploring the option to switch could be a wise move. There’s a chance you could secure a better deal, particularly if you’ve aged since taking out your existing plan.
Additionally, any increase in your property’s value or changes in your health status might qualify you for additional funds.
Moreover, fluctuations in interest rates could potentially result in substantial savings over the lifespan of your plan.
It’s worth investigating your options to ensure you’re making the most financially sound decision.
Looking for a quote?
While we do not provide a quote or call-back service as our website is purely informational, we understand that some people do want an equity release quote.
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To find out how to get the best equity release quote read our guide
