Using equity to help family
Illustrative example — not a real client result
Understanding what releasing equity involves.
The challenge
Homeowners with a largely paid-off home want to help their child with a deposit and are unsure what borrowing against their home would mean for them.
The approach
- Estimate usable equity from a current valuation and the lender's maximum loan-to-value ratio.
- Check the repayments fit their own income, expenses and retirement timeline.
- Discuss loan structure while referring tax, estate and legal questions to appropriate advisers.
Example outcome
In this example, the homeowners understand how much they could release and what the repayments may look like before deciding.
Releasing equity is new borrowing secured against your home, with its own repayments.