Can I make interest payments or reduce the debt – just like with a mortgage?
The answer is yes, depending upon your lender. Some lenders will allow you to make interest payments, just like with a mortgage. If you pay all the interest, your total debt will remain the same. It also doesn’t have to be you who makes the payments; if you take out an equity release scheme to help your children or grandchildren onto the property ladder, they could make the payments so that their inheritance doesn’t reduce further.
Some lenders will also allow you to repay up to 10%-15% each year of the initial amount borrowed.
‘Our adviser explained everything really well so that we were both happy and described all the pitfalls involved with releasing equity – which was really nice because we knew she was being transparent; we really trusted her.’AS, successful over 55 equity release scheme applicant, Walderslade, Medway, Kent