A roll-up mortgage – this is when the maximum percentage of a home’s value can be released via a loan. Instead of paying interest on the loan each month however, you choose to allow the interest to be rolled up and added to the loan so that your debt gets larger. The amount you originally borrowed, plus the accumulated interest, which has been rolled-up, is only repaid when your home is sold.
Drawdown mortgages are roll-up schemes where instead of you releasing the entire maximum amount of equity available at the outset, a maximum facility is created and made available to you to take a minimum amount initially and then only draw down further money when needed. Interest is only charged on the amount actually taken and not on the full facility. This helps avoid debt build up and also overcomes the mistake of taking the maximum available simply to deposit it at lower rates in a bank or building society until you need it.
Home Revision Schemes
With a home revision scheme, a homeowner chooses to sell their property to the provider at 20% – 60% of the home’s value, with the right to remain on the premises rent-free for life.
Equity Release Calculator
Your home may be repossessed if you do not keep up repayments on your mortgage.