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Find the Right Equity Release Deal - Rates from 2.95% for those 55 and Over.
Nationwide is the UK’s largest building society and is among the top three providers of mortgages and savings to UK consumers. In 2016, as part of the building societies’ expansion for their ‘later in life borrowing’ services, Nationwide increased the maximum age on loans from 75 to 85 years of age.
Expanding further, the Building Society have now rolled out their Lifetime Mortgage product suited for customers both new and existing, between the ages of 55 and 84.
The only requirements are that older borrowers either own their home or use the money to repay an existing mortgage, leaving them free to use the remainder of the funds released to spend as they want or need to.
The aim of the Nationwide Equity Release scheme is to help older borrowers both in retirement or nearing retirement to access the finance they have tied up in property wealth. The building society identified that those over 55 years of age are sitting on approximately £1.8 trillion in property wealth.
With an ageing population, with borrowing rates declining, and with some homeowners trapped in interest-only mortgages and many retirees facing an income shortfall in retirement, the hope is to help over 55's release some of the cash they have tied up in their homes.
Cash they can then use as they need or want, helping to make life more comfortable in retirement. The building society is hopeful that being the first major high street lender to become a member of the Equity Release Council and to roll out their lifetime mortgage product that it will inspire more innovation from other banks and building societies. And that they too will start to offer new lines of products to cater to the under served over 55 age group with full or near full home-ownership.
In addition to voluntary membership of the Equity Release Council, Nationwide has indicated that they are fully supportive of the Financial Conduct Authorities consultation to ease regulatory restrictions to allow more lenders to offer retirement funding solutions.
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Things to Know about the Nationwide Lifetime Mortgage:
No interest is payable on the Nationwide Lifetime Mortgage as it uses interest roll-up. The interest is added to the capital and doesn’t need to be repaid. Instead, the loan will be paid when both people on a joint application die or move into a care home over the long-term.
There is an option to repay up to 10% of the funds released per year without penalty; however, that is optional and not a requirement.
The Guarantees on Offer
On joint policies, the Right of Tenure applies to the surviving homeowner, and there is a no negative equity guarantee provided.
To access the Nationwide Lifetime Mortgage, in accordance with the Financial Conduct Authority Lender guidelines, it is essential that financial advice is sought. You cannot buy a lifetime mortgage product directly. It must be submitted through an intermediary.
The Nationwide Equity Release scheme is being run in partnership with Age Solutions, which is part of the Age Partnership Group and is a registered member of the Financial Conduct Authority. As part of the initial rollout of the Lifetime Mortgage by Nationwide, the building society announced that both new and existing customers either in or nearing retirement could further benefit from zero advice fees, valuation fees or product fees.
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There are no spending restrictions on any funds released through a Nationwide Lifetime Mortgage. The equity release scheme aims is to provide finance to those in retirement or nearing retirement who could benefit from unlocking some of the cash from their properties.
The only requirement is for those with an existing mortgage to use the funds released to repay the amount owed on the outstanding mortgage.
As part of Nationwide’s broader long-term plan, they are aiming to address what’s been described as a long under served market by the mortgage industry as a whole.
The Nationwide Equity Release scheme gives older borrowers another way to unlock the cash from their homes. They can use the funds as they need or want to and without the obligation of any repayments, unless, of course, the customer chooses, in which case up to 10% repayments on the loan capital can be made each year, with the additional benefit of tiered early repayment charges helping to lower the cost of borrowing in retirement.
Nationwide’s entry in the equity release market makes them the first major high street lender to register with the Equity Release Council and join what’s long been reserved as financial products offered by insurance companies and specialist retirement finance providers.
While the rates are on the low side for a LTV lifetime mortgage from Nationwide, it’s not groundbreaking. What is good is the no product or advisory fees, with only legal fees being required by consumers, the cost of entering into equity release is low. However, over the term of the lifetime mortgage, given interest roll-up is used, the total amount borrowed can increase fairly fast bringing the total cost of borrowing higher.
The only way to access the Nationwide Equity Release or any other is to consult with a financial advisor. 1st UK has experienced staff on hand who know the equity release market, the rates on offer, the terms attached and are independent, so we can run an equity release whole-of-market comparison to find out if Nationwide’s Lifetime Mortgage is suitable and the most affordable for your situation.
There’s no obligation to proceed, our advice is free, and our knowledge is second-to-none.
Call our advisors today to get impartial advice with no obligation to find out if the Nationwide Equity Release could help you unlock access to £10,000 from your property.
Please note that the Nationwide logo is a trademark of the Nationwide Building Society, to which we have no direct affiliation. The equity release firms we work with provide quotes from many providers.
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1st UK have formed strong relationships with finance providers, meaning we are often the first to hear about new products before they reach the market.
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