Equity Release

[Frankieola]

If my parents wanted to do equity release, is there a way of doing it that we could pay the interest charges so that the equity released would stay the same at time of sale?
Also, can equity release be done if the house has been used as a guarantee against a business or any other loan?
The house is worth about £450000 and paid for in full but has a business loan of £30000 secured against it. Many thanks.

[SirOracle]

Probably but you need to consult a qualified financial adviser.

[Dogsbody2]

A life-time equity release scheme allows the advance of a loan then no interest is paid until the home is sold, when the advance and all the rolled-up interest is paid back.
What you are asking for doesn't sound like one of these - it sounds like a secured loan with interest only payments. There would probably be a time limit enforced - like 10 years.
Definitely IFA territory.

[gianty]

With equity release, you can usually choose to make interest repayments or not. This is with a lifetime mortgage i believe. You can service the interest so that the total amount of debt never exceeds the initial amount.
Not sure about the second part. I believe you may have to clear it off? I would seek independent professional advice. Does this help? https://www.equityreleasescotland.org/faqs/what-is-equity-release-and-how-does-it-work/

[fiction-factory]

The interest rate will be on the high side- maybe 6% at best so if they borrowed say £100000 that would cost you £60000 over 10 years. It would clearly be a lot more if they borrowed nearer £400000. However in my experience they will not lend anything like the full value. There will also be set up fees, legal fees, possibly early repayment fees, and they can place conditions such as you must do regular maintenance, decorating etc. It's a difficult area so I would pay for financial advice first.
Rather than equity release couldn't they just remortgage over say 10 years?