What Is The Maximum Equity I Can Borrow?
The maximum amount of equity that can be released is based on a number of factors such as age of the youngest homeowner, the property value and whether any poor health could be considered. Each lender will have its own scale of loan-to-value ratios which will apply based on a certain age. This percentage is then applied to the house valuation to give a maximum lump sum figure.
In practice, the younger an applicant is the less any lender will offer as a cash lump sum. The reason being life expectancy as the younger their age, the longer their potential lifespan. Therefore, it could be dangerous for any equity release company to offer too much, too young as potentially with roll-up schemes the balance could exceed the property value which would prove costly to them as the no negative equity would need to be invoked.
Likewise, should ill-health be stated then following a doctors report the lender can offer an even greater lump some than any standard equity release schemes. The use of an online equity release calculator will assist with any calculations for either a standard lifetime mortgage, enhanced equity release or the interest only lifetime mortgage option on this website.
