This page was last updated on 1 November 2020.
Home Reversion Calculator
This article is a guide to home reversion calculators.
It will give you information about what a home reversion plan is, and help you understand how to use equity release calculators.
What is a home reversion plan?
A home reversion plan is a kind of equity release where you sell part of your home to a mortgage company.
In return, you gain tax-free money. You receive more money from the reversion provider if you sell a larger share of your home.
The money you release with a home reversion scheme can either take the form of a cash lump sum or a regular income .
When you release equity from a proportion of your home in this way, you will be granted a Lifetime Lease. This is a legal document promising that you can remain in your home until you either die or move into long-term care..
You will not need to make any rent payments after selling a percentage of your property value with a home reversion plan. Equity release home reversion plans also have the option of safeguarding a proportion of your property for your family as inheritance.
The percentage share that is sold to the home reversion plan provider stays fixed until the end of the term. Therefore, if you want to cancel home reversion schemes early, you will need to buy back the company’s share at full market value.
You can use a home reversion plan calculator to see an estimated quote for how much money you could get through these types of equity release schemes.
Here is a short explaining what a home reversion scheme is.
What is a home reversion calculator?
A home reversion equity release calculator is a tool that helps you find out how much money you could receive with home reversion plans.
Note these are different from lifetime mortgage calculators that you often see.
- All you need to do is input some basic data into the calculator about:
- Your age, or the age of the youngest homeowner. You must be at least 60 years old.
- Your gender.
- Your marital status. Calculators use this to find out if you’re making a single or joint application.
- The estimated property value of your home. To qualify for a plan, your house must be worth at least £80,000.
- Your postcode.
- The percentage of equity you would like to release with these financial services.
Try our free home reversion calculator and see how much you could borrow in 30 seconds
The calculator tools need this information because there are strict lending criteria that customers need to meet in order to qualify for home reversion.
Calculators analyse this basic data to see how much you could borrow from different providers. The equity release home reversion calculator will then give you an estimate of the maximum amount of money you could get as income or a lump sum.
Typically, home reversion companies will only buy a share for between 30% and 60% of the full value of your property. The exact rate available depends on your age, the value of the property, and the percentage of the property that you are selling.
The older you are, the greater the lump sum that you can release. This is because the home reversion provider can expect to receive their profits sooner, and there will be less risk to them of your property being devalued over time.
You may also be asked to provide contact details such as an email address or phone number. This is so that you can be sent a personalised illustration and quote.
Are home reversion plans regulated?
The best lending companies are also members of the Equity Release Council trade body and all provide a similar range of services.
This means that plans will have protections to help reduce the risks:
- A lifetime tenancy deal promises that you can remain living in your home for the rest of your life, even though part of your property has been sold.
- The ability to move your home reversion scheme to another property agreed upon by the lender.
However, it is important to understand that equity release may impact how much tax you owe as well as your entitlement to means-tested benefits.
You should contact an independent financial adviser to get more information and advice on these and a lifetime mortgage if you think that is more appropriate.
They will discuss your options and help you understand the features of home reversion so that you can work out which plans are right for you.
How much interest do you pay back on equity release?
No interest is charged for a home reversion equity release scheme because the sum of money you release is not a loan.
However, other more popular forms of equity release such as flexible lifetime mortgages have a fixed interest rate for life.
The average roll-up rate for a lifetime mortgage is between 2.5% and 6% AER depending on your age, health, property, and the product range that you select.
You can find more equity release advice and information about lifetime mortgages and the other types of equity release products available and how much you can borrow here.
You should speak to a financial adviser if you have any other questions about the lump sum you could borrow with equity release in retirement. They will give you a personalised illustration and talk you through the risks.
We can help guide you through the home reversion process and answer any questions you might have.
First, check how much money you could receive from equity release then speak to someone, if you have more questions.
1) book an appointment in the calendar below.
3) Leave your contact details and we will get in touch with you
All calls regarding equity release are undertaken by Key Equity Release, the UK’s leading specialist in this area.
Other articles that you will find useful
Lifetime Mortgage Providers
The Equity Release Council trade body has 14 members. These lifetime mortgage providers are authorised and regulated by the Financial Conduct Authority. They all abide by the ERC’s no negative equity guarantee.
Home Reversion Plan
A home reversion plan is a scheme where you sell all or part of your home to a mortgage company in return for tax-free cash. The money you release with a home reversion scheme can either be a cash lump sum or a regular income.
Home Reversion Calculator
A home reversion equity release calculator is a tool that helps you find out how much money you could receive with home reversion plans. These are different from lifetime mortgage calculators that you often see.
Drawdown Lifetime Mortgage
A drawdown lifetime mortgage is a type of life mortgage where you can release equity from your home in a series of small withdrawals. This is instead of simply withdrawing one large cash lump sum at the start of the mortgage term.
Lifetime Mortgage Rates
The majority of lifetime mortgages have a fixed interest rate for life. Therefore, they are sometimes called a ‘lifetime fixed rate mortgage’. The rate will range between providers and can change quite often..
Mortgages For Pensioners
If you are a pensioner in later life, you may be considering a lifetime mortgage as a way of supplementing your pension income, paying off debts, supporting family, or paying for home improvements in retirement.