Examples of How Much Lifetime Mortgage Calculators Can Release

A lifetime mortgage is based on a couple of things: age, property value, and interest rate. There are two factors you can enter into lifetime mortgage calculators: age and property value. The results you see from your calculations are only as accurate as the information you input. Before you can determine the maximum equity release you need to understand these two factors. Details regarding loan to value percentages will be shared based on the Aviva Lump Sum Max plan based on a single person taking out the equity release product.

Calculating your Maximum
The loan to value percentage is attained based on the age of the youngest homeowner. In the examples here there is only one person to be concerned about in the loan. Remember two things:

• The younger your age the lower the loan to value percentage will be.
• The older you are the higher the loan to value percentage will be.

You must be at least 55 years of age to enter into an equity release product. This is also the same for the Aviva Lump Sum Max plans. For some companies you may be required to be 60 or 65 years of age before the plan is available to you. It is important to know you qualify for the product first.

Additionally, your property needs a value of at least £60,000 in order to be considered for equity release. If you do not have this much value in your home you do not qualify even if your age qualifies.

As long as you meet both criteria you can begin to use lifetime mortgage calculators to determine the loan to value percentage or age to percentages as some may call it.

Age to Percentages for Aviva
The following outlines a charge based on age and the percentage of property value you can gain from an Aviva product. Notice that the ages increase and when the increase is shown the percentage of property value has also increased. The maximum property value to obtain is at 90 years of age. The lowest property value maximum is at the age of 55.

Age Percentage of Property Value
55 – 20.5%
60 – 25.5%
65 – 30%
70 – 36%
80 – 47%
90 – 52%

For a person who is 90, it is possible to release more than 50% of the property value on the assumption the person probably has 10 years or less. It should be mentioned that with lifetime mortgages and current interest rates, the initial lump sum provided can double in 10 to 12 years. If you take out 52% at 90 and live to 100, you may have 100% of the property value rolled into the loan repayment due to interest and the capital lump sum given. Even at 90 with the maximum amount taken you might spend the entire home property value in a loan and leave nothing as an inheritance.

Examples of Percentage Based on Property Value
Now that you have an age and percentage of property value, a calculation can be done here to show you the results. Take age 65 at 30% percentage of property value, where your home is valued at £100,000 and you will find you can get a maximum amount of £30,000 in a loan. This means of the £100K you can take out at most £30K. If you are aged 55 you can get approximately £20,500. A person aged 90 may receive approximately £52,000 to live on.

Examining what you Need
Now that you have some examples of potentials it is time to determine from the table and using equity release calculators if you can truly obtain enough in home property value as an equity release to be worth the lifetime mortgage.

The sum of money you receive is tax free cash. There are no parameters on how you have to use it; however, you should be concerned about how it is used. Many retirees are seeking equity release as a supplement to their current income. Since pensions can run dry depending on how long a person lives it is important to consider whether downsizing your home is the better option to taking out a lifetime mortgage at this stage in your life. With cut backs on how you spend money and downsizing you may not need a lifetime mortgage. If you decide after using the lifetime mortgage calculators that it is still the best option, you are ready to speak with an independent financial adviser to discover the best product for you based on your maximum lump sum needs.