Release of capital

What are capital release interest rates

The lowest capital release interest rate is currently 3.67% (AER) fixed for life. The highest interest rate on the market is 7.10% (AER). No, you don’t have to pay taxes on capital release. When you sign up for a capital release plan, you receive a tax-free sum.

This is because it is a loan, rather than a form of income. Phil wants to free up capital and pay off an existing mortgage and have access to more funds to help his retirement. Your advisor is also obliged to inform you if there are more suitable options for you or if the release of capital is not appropriate in your circumstances. If you’re considering freeing up capital, it’s important to consider the pros and cons and get expert advice before making any final decisions.

To better understand what it may cost you to free up capital with a lifetime mortgage and compare it to other financial solutions that may be available to you, it is essential to obtain advice on releasing capital from a fully qualified equity release professional. Releasing capital can also affect your current and future eligibility for state benefits, so be sure to ask all the necessary questions when talking to a financial advisor. The actual rate you get when you take out a capital release plan will depend on your individual circumstances, your requirements and the product selected. The lifetime mortgage interest rate available to you will largely depend on your age, the value of the property, the amount you want to release, and the type of plan you choose.

In your free initial consultation, you can learn more about capital release works and if they are right for you. The interest rate on your capital release plan can have a significant impact on how much you consider releasing and how much you end up owing in the future. You will also receive a free copy of The Telegraph Media Group Guide to Equity Release, which is offered to you by Responsible Equity Release, both by email and by post. Some capital release lenders will also impose additional expenses, such as termination charges, that will affect the interest rate.

It’s worth noting that if you have any outstanding mortgage balances on your home, you’ll need to use the equity you release to repay it. A reduction reserve helps you lower your capital release interest rates because your money stays on the reserve line and you only pay interest on the money you withdraw. If you’re considering releasing equity, it’s important to find out what the costs associated with it are, just as you would with a normal mortgage. Use the free equity release calculator on this page to find out how much equity you could unlock from your home.


Claude Owen

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