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The 4 Rs of ER: Release, Repayments, Remortgage, Reassurance

By 30th November 2022May 25th, 2023Blog

In the current economic climate, equity release can be a sensible and flexible way to finance later life needs. But what is it about it that makes it such a sound financial proposition for many? 

The first R: Release

Equity release customers accessed an average of more than £114,000 from their property wealth, tax-free, in Q3 2022.1 

That went towards repaying existing mortgages, tackling and consolidating existing debts, gifting money to loved ones or making home adaptations and improvements to ensure properties remain suitable.

Right now, your client could be facing several difficult decisions. But through equity release, they could utilise their property wealth to help meet and overcome current financial challenges and enjoy a more comfortable later life. 

The second R: Repayments

Thanks to the flexibility of a lifetime mortgage, your client has more control over their finances with several repayment options available.

No monthly repayments

Your client can clear their existing mortgage or debts and choose to make no monthly repayments. This should significantly reduce their monthly outgoings and free up additional disposable income. 

Partial capital repayments

Partial capital repayments are also an option. This allows your client to make voluntary, ad-hoc repayments each year to reduce the size of the loan on which the interest is charged.

Interest payments

Alternatively, your client could choose an interest-payment lifetime mortgage which allows them to make regular full or part payments towards the interest each month to help manage the size of their loan. 

The third R: Remortgage

In as little as five years, your client may be able to remortgage to a new plan to release further funds, add further protections, or secure a lower interest rate.

By having the option to remortgage, your client has more control over their later life finances as the plan they choose today doesn’t necessarily have be the same plan for life. 

The overarching (fourth) R: Reassurance

With current economic conditions, it’s important customers find products that are highly personalised. Equity release offers such personalisation.

Inheritance protection allows consumers to ringfence a percentage of their home’s future value to be passed on when they die. 

Downsizing protection ensures your client can repay the loan without incurring an early repayment charge if they move and their new property doesn’t meet the lender’s criteria. 

It’s these features, amongst others, that ensure equity release remains a flexible financial option for many in later life.

Air is the next generation, industry-leading later life lending platform. Enabled by technology, knowledge and people, we offer financial professionals, from advisers to lenders, best-in-class digital sourcing tools, personal development services and incentives; all designed to support and reward your business growth.

Air Sourcing offers fully live rates and API integrations to the biggest lenders in the market, plus Air Academy gives market-leading accredited training.

1Key Group’s Market Monitor Q3 2022