Equity Release For School Fees
If you’re aged 55 or older, you may consider equity release schemes such as a lifetime mortgage or a home reversion plan. These schemes allow you to release equity from your property without making monthly repayments. Instead, the borrowed amount, plus interest (if applicable), is repaid when you sell the property or upon your death.
Equity release can be a suitable option for older homeowners who want to access cash tied up in their property to fund expenses such as school fees. However, it’s crucial to understand the implications of equity release, including the impact on your inheritance and future financial flexibility. You should seek advice from an independent financial advisor specializing in equity release to explore whether this option is right for you.
Remortgaging to Release Equity
You can apply for a new mortgage on your property, borrowing an additional amount (in this case, £50,000) on top of the existing value of your property. The lender will assess your affordability and eligibility based on factors such as your income, credit history, and the value of your property. If approved, you’ll receive a lump sum of equity, which you can use to pay for your son’s school fees or any other purpose.
Keep in mind that remortgaging typically involves monthly repayments, so you’ll need to budget for these ongoing costs. Additionally, interest rates and fees associated with remortgaging may vary between lenders, so it’s essential to compare offers to find the most suitable option.
Remortgaging is in essence switching from one mortgage lender to another but staying in the same property. Higher income or a rise in your property’s value means you could remortgage and raise more money to help pay for school fees.
For more information, you can view our guide to remortgaging.
Remortgaging to Pay for School Fees Summary
Before proceeding with either option, it’s important to consider your long-term financial goals, the potential impact on your financial stability, and any alternative funding sources available to you. Consulting with a mortgage broker like John Charcol can help you assess your options and make an informed decision based on your individual circumstances.
If you’d like to discuss your enquiry in more detail, please call 023 8235 2300 and we can arrange for you to speak to one of our consultants.
