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Equity Release Costs and Rates in Windsor
Making sense of costs and interest rates for Equity Release
Equity Release is designed to access tax-free funds from the equity in your home. Having a clear understanding of the costs and interest rates associated with Equity Release, is a significant part of the decision-making process for homeowners in Windsor. To help you, here is an overview of the things you should know.
Interest rates
The most common Equity Release plans are Lifetime Mortgages. The mortgage attracts interest which accumulates over time. It is usually repaid when your home is sold.
As Equity Release is intended for long-term borrowing, interest rates are generally higher than standard mortgage rates. Some things you should consider are:
Current Equity Release market rates typically range between 5% and 8%.
Compared to high street mortgages, Equity Release interest rates are often around 1.5% higher than on standard residential mortgages.
Most Equity Release products include fixed interest rates for life, to offer more certainty over costs.
The age of the borrower can impact the rate. They may be slightly higher for borrowers aged 55, than those aged 65+, for example.
How does interest affect the final payment?
Equity release plans compound interest, so the amount owing can increase significantly over time. For example, a £50,000 Equity Release with a 6% interest rate could double in 12 years if no repayments are made.
To manage the cost of interest accumulation, and subject to the terms of the product, homeowners can opt to make voluntary payments. Some borrowers can choose a drawdown option whereby, instead of taking a lump sum payment, money can be withdrawn as needed to reduce compounding interest.
Other costs to be aware of
1. Most lenders charge arrangement or set-up fees, which can range from £500 to £3,000.
2. Property valuations are required by lenders and can incur costs of between £200 and £600.
3. Legal fees - for the cost of drawing up paperwork and providing legal advice -usually range from £1,000 to £2,000.
4. Financial adviser fees typically start at £1,000.
5. It is also important to be aware that some lenders apply early repayment penalties if you wish to discharge the mortgage early. This cost can vary depending on the lender and product.
Is equity release right for you?
Understanding the costs and interest rates of equity release is essential for making an informed decision. If you're considering an Equity Release plan in Windsor, UK, working with a local Equity Release Specialist can help ensure you find the best option for your financial situation.
Committed to helping local residents fulfill their retirement goals.
If you’re a homeowner in Ascot, Windsor, or beyond and are considering equity release, Autumn Financial is here to guide you.
With Toby Wheeler’s expertise and our unwavering commitment to client satisfaction, you can trust us to provide the support and advice you need to make informed, confident decisions about your financial future.
WHO ARE WE?
CM Finance Limited is an appointed representative of Connect IFA Ltd who are authorised and regulated by the Financial Conduct Authority (FCA) registration number 441505. The FCA does not regulate some Business Buy to Let Mortgages and Commercial Mortgages to Limited Companies. The information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
Contact Us:
Address: 42 St. Lukes Road
Windsor, SL4 2QQ
Phone number: 01753 358007
FEES:
There will be a fee for mortgage advice, the precise amount will depend upon your circumstances. Your Consultant will confirm the amount before you choose to proceed but we estimate it to be £999.
COMPLAINTS:
It is our intention to provide you with a high level of customer service at all times. If there is an occasion when we do not meet these standards and you wish to register a complaint, please write to: Compliance Department; Connect IFA Ltd, 39 Station Lane, Hornchurch, RM12 6JL or call: 01708 676110. If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service
financial-ombudsman.org.uk
CONSIDER:
Equity release plans are not right for everyone and it is important that you fully consider your options and receive impartial financial advice before making a decision. It is also important that, if you do decide to use an equity release product, you need to be sure it is one that meets your needs. If you would like to end your lifetime mortgage early, then you may have to pay a substantial early repayment charge. A professional adviser can help you to choose the plan that is right for you. To understand the features and risks, ask for a personalised illustration.
COMMISSION DISCLOSURE:
We are a credit broker and not a lender. We have access to an extensive range of lenders. Once we have assessed your needs, we will recommend a lender(s) that provides suitable products to meet your personal circumstances and requirements, though you are not obliged to take our advice or recommendation. Whichever lender we introduce you to, we will typically receive commission from them after completion of the transaction. The amount of commission we receive will normally be a fixed percentage of the amount you borrow from the lender. Commission paid to us may vary in amount depending on the lender and product. The lenders we work with pay commission at different rates. However, the amount of commission that we receive from a lender does not have an effect on the amount that you pay to that lender under your credit agreement. CM Finance Limited is registered in England and Wales under reference number 13751517
Registered address Merrimen Oakley Green Road Windsor Berkshire SL4 4PZ