Tag Archives: Enhanced Lifetime Mortgage Calculator

Where Do I Find an Enhanced Equity Release Calculator UK?

Does an Enhanced Lifetime Mortgage Calculator UK Exist?

So what do equity release calculators do, and is there such a thing as an enhanced lifetime mortgage calculator UK?

Until a few years ago, a lifetime mortgage calculator was quite a novel application, only offered by a few select websites that allowed users to quickly calculate how much their equity release plan would endear them with as a tax-free cash lump sum. Today of course, there is no shortage of lifetime mortgage calculators on the internet, as most mortgage comparison and advice websites offer this useful application to users.

The next stage in the evolution of lifetime mortgage calculator was the introduction of the enhanced lifetime mortgage calculator on the internet. Of the four equity release companies that offer enhanced lifetime mortgages, (Aviva, Just Retirement, more2life & Partnership) an accurate enhanced calculator will pull the maximum release from each of these schemes & display these results.

An enhanced lifetime mortgage plan is basically a type of loan that allows you to access the equity tied up into your home, but takes your state of health into account. The mortgage is repaid when the property is sold, when the term of the plan ends, which is usually after you die or have moved into permanent care. At that stage, your beneficiaries will usually have 12 months to repay the lender, which invariably will come from the sale proceeds of the property.

There are different types of enhanced lifetime mortgage schemes UK, each with different lending and repayment criteria. Add to this the fact that each variable, including the applicant’s age, the value of the property, the amount needed to be released etc. determines how the loan is underwritten. The overriding factor with regards to the maximum enhanced release being possible is the severity of the health records. Basically, by completing a health & lifestyle questionnaire and answering the questions therein, will determine the effect it will have on the maximum equity release.

An enhanced lifetime mortgage calculator takes into account the type of equity release scheme, the lending terms of the particular provider, as well as the applicants’ variables such as age, property value, health and loan amount etc. to calculate how much the plan will cost.

An enhanced lifetime mortgage UK plan is different from a regular equity release scheme in that it has more generous terms of lending, based on certain special circumstances related to the life expectancy of the applicant. When it comes to a loan, the shorter the term of the loan, the lower is the risk for the lender. As such, in circumstances where the applicant has compromised health, a chronic illness, or a lifestyle that impinges on their life expectancy, lenders are able to lend at more generous terms.

In addition to offering the regular lifetime mortgage calculator, some equity release comparison websites also have the enhanced lifetime mortgage calculator. For instance, Equity Release Supermarket offers users the choice to get a quote for enhanced lifetime mortgage based on additional relevant information.

So why does an enhanced lifetime mortgage calculator UK need additional information? Because this is the information that it uses to project the expected term of the loan, which in turn determines the figures. The additional information is usually a simple health & lifestyle questionnaire with questions about your age, any serious illnesses, and any chronic health conditions you may suffer from.

The lifestyle questionnaire is used to find out whether any impairment one has will be acceptable to the lifetime mortgage companies to form the basis of any enhanced terms. These impairments or lifestyle choices that help qualify for the enhancements are as follows: –

  • You height, weight & for some lenders your body mass index (BMI)
  • Whether you smoke any form of tobacco e.g. 10 cigarettes per day for the last 10 years
  • Diagnosed with high blood pressure which needs medication
  • Entered hospital due to a heart attack, stroke or suffer from related illnesses such as angina
  • Struggle with diabetes requiring medication or even insulin
  • Diagnosed with cancer needing therapy (excludes certain skin related cancers)
  • Diagnosed with Parkinson’s disease or multiple sclerosis

Just retiring on the grounds of poor health can get you an enhancement or even the fact that you are taking prescription medication e.g. aspirin can help.

Therefore, similar to the underwriting of enhanced annuities, the equity release market has also embraced the more in-depth knowledge our insurance companies have in associating ill-health with financial products; equity release now being the latest.

But do not fear as there are websites that can help guide you to the relevant companies & tools you can employ that will provide you with the enhanced calculations to inform you of the difference any enhancement can make to the tax-free lump sum.

 

 

 

How Best to Use an Equity Release Calculator

How Best to Use an Equity Release Calculator?

With people over age 55 looking to financial products to help them to achieve their goals, it is becoming increasingly obvious that equity release calculators are achieving a fair amount of interest. For some, equity release calculators enable people over 55 to ascertain whether they can raise enough finance for a specific project or major purchase. By calculating the maximum equity release possible will help retirees ascertain whether their objectives can be fully met, or contingencies made.

Others see the benefits of an equity release calculator as a way of assessing how to supplement their pension, which has lost so much value in the past few years. With annuity rates having fallen significantly over the past years, the current return on a capital lump sum for income purposes has become a major threat as to the future of whether an annuity now provides good value for money.

Finding out how much you can borrow

Whatever the reason for wanting to find out more about equity release schemes, the best place to start is to find out how much can be borrowed. The only way to ascertain these figures is via an equity release calculator. For all these people looking towards equity release as an option then a discussion with their financial adviser is an important step toward understanding more about what an equity release plan can offer. However, by using an equity release calculator, such people can go into the conversation with a bit of additional information which might help to make the proceedings that much easier.

Enhanced lifetime mortgage calculator

Remember, if you suffer from ill-health either now or in the past then seek an equity release calculator website that offers answers on an enhanced lifetime mortgage basis aswell. If you do qualify for an enhanced equity release scheme then you will be offered a greater maximum lump sum than the norm.

Such companies offering enhanced equity release schemes are the likes of Aviva, Partnership, more2life and more recently Just Retirement with their Lump Sum Plus Plan. Check with an Equity Release Council (ERC) & Financial Conduct Authority (FCA) regulated equity release adviser for further information & whether you can qualify for the maximum lump sum, if that’s the amount you require. There are many equity release calculators on the internet. They are not like a normal mortgage calculator, but rather a form in which different parameters are set.

What factors are used in the calculation?

In order to obtain an accurate lifetime mortgage calculation the equity release lender needs the following information as a minimum: –

  • the value of the property
  • the property type (e.g. house or flat)
  • the age of the youngest applicant (min 55)

This data will provide the maximum cash release figure for a healthy person.

To further assist & possibly achieve a greater lump sum than standard rates, an impaired life equity release plan maybe available. If you have suffered from any of the following illnesses, then you may qualify for what’s termed an ‘enhanced’ or ‘impaired’ equity release plan:-

  • suffered from angina, heart attack, coronary bypass surgery or angioplasty
  • diagnosed with cancer, leukaemia, Hodgkin’s disease, lymphoma, tumour
  • diagnosed with diabetes which is controlled by medication or insulin
  • whether you smoke more than 10 cigarettes or rolled tobacco per day
  • have high blood pressure (hypertension) which requires medication
  • previously had a stroke (CVA)
  • diagnosed with MS (multiple sclerosis) or Parkinson’s disease requiring use of a walking stick or aid
  • taken early retirement due to ill-health?

This information is usually free & simply one click away once the information is entered.

What answers will equity release calculators provide?

The amount shown on an equity release calculator is the maximum tax-free cash lump sum possible, and this makes it a good place to start discussions about the implications of this figure and what the next steps are. Thankfully, when the results are provided there is usually also the ability to make contact with an independent financial adviser, who can then assist in making further recommendations about an appropriate equity release plan.

Note that some people might prefer to take out a smaller mortgage than what is shown to be available on the calculator, and this is possible. In fact, it is most likely going to be the case, as your equity release adviser will explain. Don’t assume you should always take the maximum release. This will erode the equity in your property quicker than by taking a lower initial amount & further top-ups in the future.

Any responsible equity release adviser will only advise you take an initial amount to cover your first 12 months of financial support. This will mean a lower amount of interest to pay in the shorter term. With the advent of drawdown equity release schemes, you can take the remaining tax-free lump sums as and when you require them. The minimum’s future drawdowns can vary between lenders, however even Aviva’s Flexi Plan now has a minimum of just £2,000 a time. This will save your estate £1000’s in the long run and also leave more in the kitty for yourselves at a later date not having paid as much interest.

Therefore, when initially making considerations about what home equity release plans can do, equity release calculators are a great place to start.