London, United Kingdom (PRWEB UK) 5 July 2012
The Bank of England announced it is freezing the base interest rate at 0.5% for another quarter. Whilst this should please borrowers, it will not be welcome news for savers. The interest rate is being kept low to encourage spending to help grease the wheels of the economy, but savers looking to build up a nest egg for retirement don’t want to just spend, spend, spend.
However, Bower Retirement Services has another option. It offers advice on and recommends equity release schemes that allow homeowners to release money locked up in their property rather than living off savings.
There is roughly £3 trillion locked up in property in the UK. Although £1 trillion is mortgaged that still leaves a hefty sum to play with. People that own their homes can release thousands of pounds with ease thanks to Bower Retirement Services.
Bower Retirement Services works with a variety of the country’s leading equity release providers to offer several different equity release schemes, catering to the different needs of homeowners up and down the country. There are four types of equity release schemes available: lump sum lifetime mortgages; lifetime mortgage with flexible cash release; interest only lifetime mortgages and home reversion plans.
Lump sum lifetime mortgages are similar to ordinary mortgages; equity release companies will lend homeowners a percentage of the property’s value with interest charged on the loan. However, there aren’t any monthly repayments and there is no specific term. Bower Retirement Services advises this type of scheme is best for those looking for a large lump sum for a single project such as a holiday or home redecoration.
Lifetime mortgage with flexible cash release works in the same way as the above with the additional benefit of regular cash withdrawals. This suits homeowners looking for an income as well as a big treat.
Interest only lifetime mortgages require homeowners to pay interest each month on the loan they take out against their property’s value. This requires homeowners to have some form of income. In exchange homeowners borrow a proportion of the property’s value and pay it back when they sell – without any interest as this is paid monthly.
Home reversion plans are best suited to older homeowners as the property is sold to the equity release company that then pays the homeowner a monthly income, lump sum or both. Find out how much is possible to get with an equity release calculator.