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How can bridging finance help you?

Equity release is a way of taking cash out of the home you own without having to move. Equity release is simply another name for lifetime mortgage – a long-term loan secured against your home which you can apply for once you turn 55.

It works like this. You borrow a cash lump sum, which builds up interest, but there are no monthly repayments. Instead, interest is added each year to the loan and any interest previously added, which quickly increases the amount you owe. When you (and your partner, if you’ve taken it out jointly) pass away or need to go into long-term care, the loan and the interest that’s built up is paid back – normally using money from selling your home.


You will always own your home

Every equity mortgage comes with a No Negative Equity Guarantee so you can never owe more than the value of your property when it eventually sold. Your adviser will provide you with illustrations showing how the value of the loan will increase assuming you decide not to make monthly interest payments and compare this with the projected value of your home in the future.

What you need to know about a lifetime mortgage

Taking out a lifetime mortgage, or any type of equity release, is a huge decision and commitment, and means you’ll leave a lower amount behind as an inheritance. It may have a tax impact and affect whether you’re still eligible for any welfare benefits.

All later life lenders offer a free valuation, some will charge an arrangement fee, usually between £500 and £995, this fee can be added to the mortgage balance.

You will need a solicitor to complete the mortgage for you, we can recommend and instruct a solicitor on your behalf and the legal fee will £1,095, this includes a home visit to sign the mortgage documents and VAT.

Most equity release lenders will require you to have independent financial advice when arranging a later life mortgage, we charge a fee of £1,495, this includes all the administration and is only payable on completion of your mortgage.

If you decide to end the loan before you (and your partner, for joint lifetime mortgages) die or need to go into long-term care, you may need to pay a substantial early repayment charge.

Check if you’re eligible for equity release with us (our lifetime mortgage)

To apply for our lifetime mortgage you need to:

  • Be aged 55 or over (for joint applications, you both need to be over 55).
  • Own a UK home (not including the Isle of Man and the Channel Islands), that’s worth £75,000 or more.
  • Want to borrow at least £15,000.
  • Live permanently in your home. It must be your main residence and shouldn’t be unoccupied for more than six months at a time.
  • Be mortgage-free or able to pay off any leftover mortgage with the money you've released from your home.
Check if you’re eligible for equity release

What are the pros and cons of using bridging finance?

It’s important to look at everything before you apply for our lifetime mortgage – the great bits and the not-so-good things.


Pros

  • You’ll still own your home
    You’re the full legal owner of the property – that doesn’t change.
  • You won’t be leaving your family with the debt
    Because of our no negative equity guarantee, your loved ones will never have to repay more than the money received from the sale of your property, provided that it is sold for the best price reasonably obtainable.
  • An interest rate just for you
    We tailor our interest rates to each application so it’ll be unique to your personal situation – and it’s fixed so it’ll never go up.
  • Take a little here and pay a little there if you need
    We let you choose to take a one-off lump sum or a smaller cash sum with a cash reserve to dip in to. You can also make smaller repayments if you need, subject to our terms and conditions.
  • You only pay interest on money you’ve taken out
    If you set up a cash reserve, no interest will build up on money sitting there, until you withdraw it. We’ll set a new interest rate for each amount you take out, so your initial lump sum and any later withdrawals will have their own interest rate.
  • Moving somewhere new? Our lifetime mortgage can move with you
    You can transfer your lifetime mortgage to a new home, as long as it's a type of home we can lend on. If it isn't, the mortgage will need to be repaid in full, including the interest accrued and possibly an early repayment charge. You may be able to pay off your lifetime mortgage with no early repayment charge, thanks to our downsizing protection, if you've had the lifetime mortgage for 3 years or more

Cons

  • Leaving less behind
    Even if you set aside a percentage of your home’s value for your loved ones, paying off the money you’ve released (plus any interest) will still mean you’re leaving them less in inheritance.
  • It may have a tax impact and affect certain benefits
    Taking cash out of your home through a lifetime mortgage could have tax implications or affect whether you’re eligible for certain welfare benefits. Your equity release adviser will go through all of this with you.
  • You’ll be paying back a lot in interest
    Because we add interest to your loan and the interest already added each year, the amount you owe goes up quickly.
  • It’s a big decision, and a lifetime commitment
    Our lifetime mortgage is designed to last for the rest of your life – or until you need long-term care. If things change and you want to pay this off sooner, there may be an early repayment charge.

Your questions answered for bridging finance...

What is bridging finance?
Short-term loan for property purchase or renovation, providing quick access to funds before securing long-term financing.
How quickly can I obtain UK bridging finance?
Typically within a few weeks, offering a swift financial solution for urgent property transactions.

What properties can I use bridging finance for in the UK?
It applies to various properties, including residential homes, commercial spaces, land purchases, and development projects.
What are the typical interest rates for bridging finance?
Rates fluctuate but generally align with market trends, often slightly higher than traditional mortgage rates.
What are the different types of equity release?
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What's the usual loan term for UK bridging finance?
Ranging from 1 to 24 months, offering flexibility for short-term financial needs in property transactions.
Are there additional fees associated with UK bridging finance?
Yes, commonly including arrangement fees, legal fees, and potential exit fees, impacting the overall cost.
Are credit checks necessary for obtaining UK bridging finance?
Yes, lenders usually conduct checks, but there might be more flexibility compared to long-term loans.
What happens if I face challenges repaying the bridging finance on time?
Discussing options with the lender is essential, as they might offer extensions or alternative repayment plans to accommodate unforeseen circumstances.

Get specialist advice

To find out if you could get a lifetime mortgage with us, get in touch to arrange a call with a UK-based equity release adviser.

Call free on 0800 999 3339

Monday to Friday 10:00 to 16:00
Evenings and Weekends by Appointment

Book a call    Make an enquiry

Get specialist advice
Equity Release and Mortgage Partnership

The Equity Release and Mortgage Partnership delivers pragmatic equity release advice combined with exceptional service..

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Equity Release

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0800 999 3339

info@mortgage-partnership.co.uk

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YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.

Equity Release and Mortgage Partnership Limited is directly authorised by the Financial Conduct Authority (FCA).
Equity Release and Mortgage Partnership is entered on the financial service register http://register.fca.org.uk under reference 986900.
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