Enhanced equity release calculator tools are available online. These calculators are specific to the enhanced, impaired, or ill health lifetime mortgage schemes on the market rather than home reversion or other lifetime mortgage products. Given the specific nature of these mortgages, the calculator has to take into account more information than the standard lifetime mortgage.
History of Enhanced Equity Release Plans
A decade ago enhanced equity release plans were on the market through Hodge Lifetime and Partnership Assurance. They provided enhanced options through home reversion plans. However, with changes made by the then Financial Services Authority, now the Financial Conduct Authority, the plans were discontinued, leaving the market without any enhanced home reversion or lifetime mortgage schemes.
In more recent years, new lenders have joined the market offering enhanced lifetime mortgage plans. Partnership re-entered followed by new companies like More2Life, Aviva, and Just Retirement. By new we mean new to the enhanced equity release plan, and not necessarily to the market as a whole.
Following the principles of enhanced annuity, enhanced or impaired equity release schemes use health as a way to provide the maximum equity release amount, which is where the enhanced equity release calculator comes in. Be aware that the more severe the illness is the greater the maximum equity amount will be.
Lenders Supplying Tools
Some brokerages and websites have developed the enhanced equity release calculator to help supply the maximum lump sum an individual may be able to take out of their home. Unfortunately, accuracy is difficult to predict due to the myriad questions on the health and lifestyle questionnaire which determines a person’s life expectancy. This questionnaire is coupled with a mortality indices table based on age and illness to give an applicable value.
This means the calculator is designed to give you the maximum amount based on the worst case scenario. You may or may not be a person in the worst case scenario, but that is the result you will get, therefore, you need to speak with a broker before deciding if this loan is truly right for you.
What can Brokers Do?
An independent financial broker specialising in equity release schemes should be contacted once you have a beginning figure for an enhanced equity release product. The adviser will take the enquiry beyond the standard calculator questions to see if there are any other factors that could release the maximum lump sum or if you will only be able to get a smaller amount. The enquiry is based on a Key Facts Illustration (quote) from relevant providers in the market.
A broker is able to discuss your situation with financial companies lending the money for lifetime mortgages. They can discuss whether there are other factors that might release more or see what current products are available to you.
You should be aware that even if something is advertised on TV, the Internet, radio, or through a calculator calculation, you may not be able to get that same product. This is where the broker comes in. They have resources you do not have available.
Why Use the Calculator
You are probably asking why you should use the calculator at all if you still have to speak with a broker. The main reason to use it is to see the potential maximum lump sum. If the maximum lump sum is not anywhere close to the funds you hope to unlock, it gives you an idea of whether lifetime mortgages and other equity release products are right for you.
Additionally, it tells you whether your ill health is a qualifying factor to release more equity than a standard lump sum. It might be a guide number that results, but it does prove whether going on to the next step and speaking with a broker is worth your time.
While the value might change to a lower one, the original calculation result gives you enough of an answer to get started. There are also times when the calculator is not giving you a high enough number because you have multiple health factors. If you can find a maximum lump sum that works for you based on what you input into a calculator and a broker can get more released it might work out better for you. Of course, as you use the enhanced equity release calculator, you do need to remember it is only an estimate. You always want to speak with a qualified professional who is independent to ensure you are getting the very best product for you.