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Is an Enhanced Equity Release Calculator Available Yet?

Enhanced equity release calculator tools are available online. These calculators are specific to the enhanced, impaired, or ill health lifetime mortgage schemes on the market rather than home reversion or other lifetime mortgage products. Given the specific nature of these mortgages, the calculator has to take into account more information than the standard lifetime mortgage.

History of Enhanced Equity Release Plans
A decade ago enhanced equity release plans were on the market through Hodge Lifetime and Partnership Assurance. They provided enhanced options through home reversion plans. However, with changes made by the then Financial Services Authority, now the Financial Conduct Authority, the plans were discontinued, leaving the market without any enhanced home reversion or lifetime mortgage schemes.

In more recent years, new lenders have joined the market offering enhanced lifetime mortgage plans. Partnership re-entered followed by new companies like More2Life, Aviva, and Just Retirement. By new we mean new to the enhanced equity release plan, and not necessarily to the market as a whole.

Following the principles of enhanced annuity, enhanced or impaired equity release schemes use health as a way to provide the maximum equity release amount, which is where the enhanced equity release calculator comes in. Be aware that the more severe the illness is the greater the maximum equity amount will be.

Lenders Supplying Tools
Some brokerages and websites have developed the enhanced equity release calculator to help supply the maximum lump sum an individual may be able to take out of their home. Unfortunately, accuracy is difficult to predict due to the myriad questions on the health and lifestyle questionnaire which determines a person’s life expectancy. This questionnaire is coupled with a mortality indices table based on age and illness to give an applicable value.

This means the calculator is designed to give you the maximum amount based on the worst case scenario. You may or may not be a person in the worst case scenario, but that is the result you will get, therefore, you need to speak with a broker before deciding if this loan is truly right for you.

What can Brokers Do?
An independent financial broker specialising in equity release schemes should be contacted once you have a beginning figure for an enhanced equity release product. The adviser will take the enquiry beyond the standard calculator questions to see if there are any other factors that could release the maximum lump sum or if you will only be able to get a smaller amount. The enquiry is based on a Key Facts Illustration (quote) from relevant providers in the market.

A broker is able to discuss your situation with financial companies lending the money for lifetime mortgages. They can discuss whether there are other factors that might release more or see what current products are available to you.

You should be aware that even if something is advertised on TV, the Internet, radio, or through a calculator calculation, you may not be able to get that same product. This is where the broker comes in. They have resources you do not have available.

Why Use the Calculator
You are probably asking why you should use the calculator at all if you still have to speak with a broker. The main reason to use it is to see the potential maximum lump sum. If the maximum lump sum is not anywhere close to the funds you hope to unlock, it gives you an idea of whether lifetime mortgages and other equity release products are right for you.

Additionally, it tells you whether your ill health is a qualifying factor to release more equity than a standard lump sum. It might be a guide number that results, but it does prove whether going on to the next step and speaking with a broker is worth your time.

While the value might change to a lower one, the original calculation result gives you enough of an answer to get started. There are also times when the calculator is not giving you a high enough number because you have multiple health factors. If you can find a maximum lump sum that works for you based on what you input into a calculator and a broker can get more released it might work out better for you. Of course, as you use the enhanced equity release calculator, you do need to remember it is only an estimate. You always want to speak with a qualified professional who is independent to ensure you are getting the very best product for you.

Which Equity Release Company offers Maximum Equity Release from your Home?

Retirement is a difficult time in the current economic situation due to inflation, the ending of the recession, and lower wages. While the economy is repairing itself, many families in retirement or about to retire do not have enough savings to last until death. There is a solution in retirement products including equity release. To gain the maximum equity release from your home there are a few factors that will matter: property value and age of homeowners.

Examining the Factors
Your property’s value determines what you have available in equity. Equity is usually defined as the total value of your home minus any existing loans. Therefore, if you have no loan and the value is £300,000, you have £300,000 in equity.

No mortgage company is going to offer 100% loan to value. They will offer a percentage of the loan to value based on the type of equity release you choose. A standard equity loan has monthly repayments with interest. A lifetime mortgage equity release scheme holds the repayment until the end, including interest you may owe. The interest compounds onto the back of the loan, so in 10 to 12 years, the initial lump sum you received for the loan could double. If you take out £100,000 then it could become £200,000 in 10 or 12 years.

The next part of this retirement product is age. A qualification of most companies offering lifetime mortgages requires any borrower to be 55 years of age at least. There are a few companies requiring an age of 65. In the case of dual ownership, with a spouse or civil partner, the lender will look at the age of the youngest borrower to determine the amount of the loan and if you qualify at all. The idea is the youngest borrower will live longer and will compound interest longer; therefore, the total loan amount needs to reflect the time the loan is outstanding and gaining interest.

Specialist Equity Release Companies
There are companies which target this niche market as a way to provide the maximum equity release to you. Aviva Lump Sum Max, Pure Retirement, and Just Retirement are three such companies offering the maximum amount possible. Aviva’s Lump Sum Max is currently at 5.63% with a fixed interest rate. Pure Retirement offers a product at a fixed base rate of 6.55%. Just Retirement is higher at a fixed interest rate of 6.75%. Aviva and Pure Retirement are two companies offering an incentive for retirees to sign up.

It is up to you, the borrower, to determine which product is best for you and your family. Each company has specific details, which tend to target consumers specifically. One company may not be best for all ages i.e. they may be better for older individuals, versus those just entering retirement.

Independent Advice and Due Diligence
Given the different products on the market, it is up to you to conduct due diligence by finding an independent adviser who can help you research the market and provide you with an equity calculator UK. By using a calculator it is possible to determine the maximum amount available to you. Remember, this is just to give you an idea of potential options. The company still has a say in whether they lend the maximum amount based on your qualifications. An equity release broker is ultimately going to determine the maximum release they will provide.

Also, there is a potential that your ill health could help you receive a larger than typical maximum. If you suffer from an illness, there is a product that provides an increase over the standard terms allowable to most retirees. Companies use theory of mortality tables to determine if someone will potentially die earlier than the average person, thus some of the newer schemes take this into account and will revise the maximum they are willing to offer you.

Aviva, Just Retirement, More2Life and Partnership provide variable levels of enhancement to offer you the maximum equity release possible if you have ill health. By checking with an independent adviser you can conduct research, examine their information, and determine what might be best for you and your family.

Even if you do not have ill health it is possible to get the maximum allowable for your age in a standard product. There are disadvantages with this product. Be aware of these negatives before signing a contract. It is another area your independent adviser can help you with. As always, when looking at financial products, start out with research, calculating possibilities, and then find a product that suits you rather than the lender.

How Does Age Affect the Release of Equity Calculation?

Equity release is a way to withdraw some of the cash value tied up into your property. While traditionally the only path for a release of equity would be to sell the property, equity release offers a more flexible way to continue living in your home while accessing the cash tied up into the property. This can only be facilitated by receiving advice from a qualified equity release consultant, in conjunction with an equity release provider themselves such as Aviva, Just Retirement, Hodge Lifetime & many more of these niche mortgage lenders.

First an introduction to the types of equity release

There are two types of equity release products – lifetime mortgages and home reversion plans. While lifetime mortgages are loans taken against the value of the property, home reversion involves notionally selling a portion of the property with the lender recovering the proportional value when the house is sold. In all equity release schemes, the lender recovers the money from the sale of property, which happens only after you have died or moved into a care home.

Whether it is a lifetime mortgage or home reversion, the release of equity is basically money that you receive from the lender, and which the lender can recover after the plan ends. How much the lender can afford to lend, at what rate, and whether they can afford to lend at all, depends on the value of the property, the amount of equity that needs to be released, and the expected term of the loan; namely life expectancy.

The feasibility and exact terms of an equity release plan therefore depend on different relevant factors, some of which determine the expected term of the loan or plan. Since most equity release products have no fixed term, and go on until the end of life, or until you move out and into permanent care, it is the health and age of the client that determines the expected term of the equity release plan. The age of the applicant is therefore an important factor that significantly affects the release of equity.

Relationship between age & release size

Typically, the longer the term of the loan, the more the risks are for the lender in that the loan will compound over a longer duration. As there are many variables built into life expectancy, the lender does take the risk that: –

House prices may remain static, even fall over the term of the mortgage
The equity release loan interest will accrue for longer than the average life expectancy
The health of the individual will be good, thus leading to prolonged longevity
Condition of the house may deteriorate, leading to un-saleability

All these factors place a greater strain on the insurance policy that equity release lenders have on these loans – the no negative equity guarantee. They actuarially calculate the average life expectancy and then pitch their loan-to-values in accordance with this data. They will win on some cases, but lose on others & this is all factored into the no negative equity guarantee insurance policy. The danger for lenders in hoping they do not need to use this insurance policy, lie with the outside factors mentioned above that could seriously affect these chttp://www.equityreleasecalculator.net/wp-admin/post.php?post=46&action=editalculations.

Therefore the younger the applicant, the higher the risks, and the older the applicant, the fewer the risks involved for the equity release provider. This is why the older one is, the bigger the release of equity can be offered by these lenders. Hence, when considering a release of equity, do your sums first and always obtain a Key Facts Illustration from your equity release adviser. This will detail the exact amount, year-on-year, how much the balance will reach in the future. A useful piece of data for considering what the final balance may be, albeit guessing the length of the term can be an unnerving experience!

Loan-to-value summary

The minimum age for most lifetime mortgage products is 55 years, and generally speaking, the further away you are from this age, the more you can borrow. In fact, if you are aged 55, currently the maximum lifetime mortgage scheme will allow is 20.5%. This will steadily rise as one gets older and as a rule of thumb will be 1% each year you get older. Most equity release companies allow maximum release of equity only for older clients upto approx. age 90+ with an overall maximum release from any lender of 55%.

However, home reversion plans do not commence until age 65, some 10 years later. The calculation for the size of a home reversion release is based again on age, but also the sex of the individual(s). The reversion provider will receive a proportion of the house value in exchange for a tax-free cash lump sum to the homeowner.

The difference between the home reversion scheme and lifetime mortgage is that with a home reversion you can sell 100% of the value of the property, the converse relationship exists with a lifetime mortgage. However, even selling 100% of the property doesn’t mean you receive 100% of its value. This will usually be half of the equivalent percentage sold. Thus if you sold 100%, you are likely to receive around 50% of the value. Again, like a lifetime mortgage, the older you are, the greater the percentage over & above this 50% figure you will receive.

All these examples based on age, property value & health can be inputted into a good equity release calculator to provide the results you require in order to complete your equity release research.

If unsure call 0800 471 4796 to speak to a qualified independent equity release adviser who can provide guidance on the best schemes available.

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.