Drawdown Equity Release
How to use the drawdown equity release calculator
For an estimate of the maximum you could borrow with a drawdown lifetime mortgage, simply input:
- the value of your property (which must be a minimum of £70,000 and in the UK)
- the age of the youngest homeowner (which must be at least 55)
- your postcode
This is the criteria that lenders use when deciding how much money you can borrow.
Your drawdown equity release calculator results are shown instantly in an easy-to-read table.
An introduction to drawdown lifetime mortgages
Drawdown lifetime mortgages are the most popular type of equity release plan.
Once the lender has determined the maximum they will lend you, this money is placed in a ‘cash reserve’ facility with them. Initially you must borrow a minimum of £10,000 from your ‘cash reserve’. After that, you are free to borrow as much as you like, as many times as you like – until your cash reserve is fully used.
The minimum additional borrowing is typically £500, which means you can take smaller amounts for less expensive items, without having to take more than needed.
There is no additional charge for making withdrawals, however, you’ll be charged the current interest rate, which may be different from the interest rate at the time you first borrowed. Once your drawdown request is received and processed by the lender, the money is usually paid into your bank account within a couple of weeks.
As interest is only charged on the amount you borrow (not on money in your cash reserve), you can reduce the final amount of interest to repay, if you borrow in a series of drawdowns over time - rather than one large lump sum.
If you are claiming any means tested benefits, a drawdown lifetime mortgage may not affect your claim, as the amount borrowed could be managed to keep under eligibility thresholds. Your local Equity Release Supermarket adviser will be able to talk this through with you in detail.
