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Looking into equity release? You’ll have lots of different lenders to choose from, but one of the main providers you’re likely to come across is Nationwide. The world’s largest building society¹ has a popular lifetime mortgage plan, but is it right for you?
In this guide, we’ll give you the lowdown on the Nationwide equity release scheme. This includes how it works, who is eligible, interest rates and more.
And we’ll even throw in a handy tip if you’re considering taking out an equity release scheme in another country. Open a Wise multi-currency account and you can receive lump sum or other payments from abroad for tiny fees and the real, mid-market exchange rate.
But first, let’s focus on what Nationwide has to offer in terms of equity release products.
Nationwide only has one equity release plan, and this is a lifetime mortgage. This lets you ‘unlock’ the value in your home and receive it as a tax-free lump sum payment. You don’t have to make monthly repayments, but you can choose to.
Interest is charged on this kind of long-term loan, which is only paid back when the policyholder passes away. This is usually done through the proceeds of the property when it is sold.
With Nationwide, you can borrow between £10,000 and £1 million² (if you live in England). The maximum you can borrow if you live in Scotland or Wales is £515,000². The amount you can borrow depends on your age, and the value of your property.
Other features of the Nationwide lifetime mortgage include³:
A ‘no negative equity guarantee’ - this means that when your property is sold, if there’s not enough left to repay the loan, your estate (or family members) won’t have to foot the bill.
Downsizing protection - if you want to move to a smaller, lesser value property after 5 years, but it doesn’t meet the Nationwide lending criteria, you can simply repay your loan in full without any early repayment charges.
Lifetime mortgages such as this one are commonly used by people wanting to boost their retirement income, or raise funds for a specific purpose. For example, helping one of their children put down a deposit on a home, or funding an extended overseas trip.
To apply for Nationwide’s lifetime mortgage plan, you’ll need to be over the age of 55. The maximum age for a qualifying applicant is between 84 and 94 depending on whether or not you already have a Nationwide mortgage³.
You must also be applying with regard to a property that is your main residence.
You’re not eligible if you³:
- Live in a Grade I or Grade II listed building
- Have a property that is above or next to commercial premises
- Live in the Channel Islands, non-mainland Scotland, the Isle of Man, Scilly Isles or Northern Ireland.
Before you can take out a Nationwide lifetime mortgage, you’ll need to pass a quick eligibility and an affordability check³.
The good news is that Nationwide doesn’t charge any valuation, product or advice fees for its lifetime mortgage. It also offers a £1,000 cashback payment on completion, which it could be a good idea to put towards the cost of independent legal advice.³
The interest rate which will apply to your Nationwide lifetime mortgage varies depending on your age and the value of your property. But it’s usually within the range of 3.01% and 4.52%, and it’s fixed for life². This means it won’t fluctuate or change.
You don’t have to make any monthly interest or capital repayments with this equity release product. However, there is a flexible, penalty-free option to repay up to 10% of the total loan amount each year³.
Unlike some other providers, Nationwide doesn’t have an equity release calculator. This is an online tool that can tell you how much money you can unlock with equity release, using details such as your age and the value of your home.
If you want to find this out, you’ll need to make an appointment with one of Nationwide’s Later Life mortgage consultants. They can do the eligibility and affordability checks we mentioned earlier, talk you through your options and give you an estimate of how much you could unlock from your property.
Looking into equity release schemes in other countries? If so, consider opening a Wise multi-currency account first.
With Wise, you can avoid bank fees, high currency conversion charges and poor exchange rates when receiving payments from other countries. So, if you’re expecting a lump sum or regular equity release payment from abroad, receive it with Wise and get paid in the local currency. Then, you can convert at your leisure for a tiny fee and at the real, mid-market exchange rate.
So, that’s pretty much it - everything you need to know about the Nationwide equity release scheme. We’ve covered all the essentials of its lifetime mortgage, including eligibility, features, interest rates, fees and more.
This should give you a good starting point as you research equity release products and decide whether it’s right for you. Remember to look into the risks and costs carefully, and get expert advice you can trust.
Sources used for this article:
- Nationwide - about
- Nationwide - Later Life mortgage rates
- Nationwide - equity release lifetime mortgage
Sources checked on 18th May-2021.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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