Drawdown Equity Release

Drawdown Equity Release

A drawdown equity release is a by product of a lifetime mortgage equity release mortgage, enabling individuals to unlock a considerable amount of cash from their home. To be eligible for a drawdown equity release, individuals must be over 55 years old. An individual looking to arrange a drawdown equity release product is aiming to generate cash to contribute to any financial or personal plans they may have.

Drawdown equity release schemes derive from lifetime mortgages. Other forms of lifetime mortgages include interest only schemes interest rollover schemes and home income plans. Drawdown equity release schemes differ from these products. The borrower is able take out smaller lump sum of cash throughout the term of the mortgage, rather than receiving one large initial lump sum of cash. The borrower and provider agree on the maximum loan available to the borrower. A cash reserve can be arranged by the individual, enabling them to receive a consistent lifetime income, or just withdraw cash whenever they require it.

Interest rollover schemes are similar to a drawdown equity release, in the sense that the provider permits the borrower to repay interest along with the mortgage debt at the end of the arrangement. The arrangement is ended when the borrower dies, or is transferred to a care home for an indefinite period, due to declining health. Interest is calculated on a monthly basis and compounded to the total debt of the mortgage.
Our team of financial advisers make it their duty to seek a drawdown equity release plan which is not only suitable to the needs and requirements of the borrower, but also the beneficiaries who hope to inherit the borrower’s estate one day.

Drawdown equity release plans are accompanied by many advantages, such as the individual being in control of their newly-generated finances, withdrawing cash whenever they require it. It is also possible for the borrower to set up an income scheme, enabling a consistent flow of income.

As well as the number of benefits associated with a drawdown equity release, risks may also occur. Drawdown equity release plans usually have higher interest rates compared to other lifetime mortgage plans. Equity will also be reduced due to compounding interest rates. This means the borrower’s inheritors will benefit from less equity in the estate, after the borrower’s death.

A drawdown equity release has the potential to aid individuals in achieving financial stability, or even fulfilling personal requirements. However, the risks of drawdown equity release must not be taken lightly, as the arrangement may lead to accrued debt and financial difficulties. With the help of our advisers we are certain each client will be suited to an efficient, cost-effective form of drawdown equity release.

Searching for a drawdown equity release? Get in touch with our team of financial advisers today.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.

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This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.