Landlords of buy to let properties and homeowners aged 55+ with a second home can more easily access their property wealth thanks to exciting new equity release products recently launched.
The new buy to let equity release plans are specifically aimed at landlords aged 55 and over, allowing them to unlock a cash lump sum from their portfolio entirely tax-free.
The second home equity release plans are designed for people aged 55+ who own a second home that they live in for at least 4 weeks a year, and would benefit from a boost their retirement income.
With these exciting new plans, later life homeowners will be able to free up even more of their money tied up in their bricks and mortar to spend however they choose. It could help thousands of people in or approaching retirement whose money is tied up in property that they’d rather not sell.
Until recently, equity release was only possible on a single main residence for homeowners aged 55+. These landmark new products mean retirees are now free to unlock their property wealth from multiple properties without having to sell up to access their equity.
Calculate how much you could unlock from your home
Buy to Let Equity Release Plans
Landlords aged 55-90 can now unlock a lump sum from one or more of their properties in England, Scotland and Wales worth between £70,000 and £6million.
The new buy to let equity release plans require no affordability checks are not available for the purchase of additional properties. Any existing mortgages will need to be cleared with the money unlocked by the equity release plan.
There are some restrictions as to who the buy to let properties can be let out to after the equity release plan is arranged. For instance, houses can only be let out as a single family dwelling, and amongst others, cannot be let to students, companies and housing association tenants.
The three product options for the buy to let plans are:
-
Landlord Lifestyle Options
You receive a one-off lump sum and no payments are due. The interest is added to the loan each month for the life of the loan.
-
Landlord Interest Select Options
You can choose to service some or all of the interest. The payment amount can be between 50% and 100%, and the payment term can be from 5 years to the full term of the loan.
-
Landlord Voluntary Select Options
You can make a contribution of up to 10% of the initial loan amount each year, without facing an early repayment charge (ERC). This effectively allows you to repay the loan in full over time.
Second Home Equity Release Plans
The Second Home equity release plans are very similar in their offerings to the buy to let plans. Homeowners must be aged between 55-90 and can arrange an equity release plan on their properties in England, Scotland and Wales which are not their primary residence.
The loans are available on property valued at £70,000 to £6m, although properties worth over £6m can be reviewed on a case by case basis. The second home must be used at least 4 weeks a year by the homeowner.
The three product options for second home equity release plans are:
-
Second Home Lifestyle Options
Your client will receive a one-off lump sum and no payments are due. The interest is added to the loan each month for the life of the loan.
-
Second Home Interest Select Options
Your client can choose to service some or all of the interest. The payment amount can be between
50% and 100%, and the payment term can be from 5 years to the full term of the loan. -
Second Home Voluntary Select Options
Your client can make a contribution of up to 10% of the initial loan amount each year, without facing an early repayment charge (ERC).
