Later life borrowing has become very popular and highly specialised and needs to be a well-thought-out area of financial planning.

An Equity Release mortgage is a way whereby a homeowner, who must be over 55 years old, can release cash from their property and have the option to roll-up the interest payments until a defined circumstance such as death or moving into long-term care when the property is sold and the loan repaid. The benefit of this is that there is no monthly payment to the lender, which asset-rich and cash-poor retirees love.

I find the main reasons for this type of mortgage are to repay a conventional mortgage (for those who opted for an interest-only mortgage many years ago) or used to reduce inheritance tax upon death. I am finding the latter option to be popular at the moment as many grandparents are helping their children or grandchildren with life events such as buying property or school fees rather than waiting for the inheritance at a later date – you will need good advice if this is your position!

These types of mortgages used to be very expensive a few years ago and got a bad name. With interest rates at circa 7% the loan doubled every ten years, and the possibility of negative equity was real. Thankfully today, there are more providers in this market (over 250 products) which has brought interest rates to between 2.5% and 3% which means they are far more competitive and good value for money.

This is a specialised area of expertise, and these mortgages do not suit everyone so if you wish to discuss Lifetime mortgages (the most popular equity release option) with an Equity Release adviser then call us on 0800 689 3173, email at hello@conranmortgages.co.uk or just complete a form on this website as we are pleased to advise you.