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Home Equity Mortgage

Find out whether equity release is right for you

Home Equity Mortgage

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  • You’re aged 62 years or older
  • You decide how you spend the money
  • You get to stay in your own home
  • You pay no extra monthly charges

If you’re aged 62 years or older and your home is worth more than your outstanding mortgage, you may be able to take out a Home Equity Mortgage and release part of your equity. That money can be used to renovate your home, provide financial support to your children or grandchildren, top up your pension or for something else altogether. Do the home equity check and find out how much equity you could release.

How does the Home Equity Mortgage work?

The Home Equity Mortgage lets you release part of your equity. You can take the money as a lump sum or in monthly instalments and spend it how you wish, such as to top up your pension. The interest you pay is added to your mortgage debt, but your monthly payments won’t increase. Releasing home equity has an impact on your personal finances. Our advisers can help you to find out more.

The Home Equity Mortgage in three steps

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1. Do the home equity check

Quickly check whether you’re eligible and how much equity you can release.

2. Make an appointment

You can only take out the Home Equity Mortgage after seeking advice, so please make an appointment with an adviser or intermediary.

3. Discuss your options

An adviser will discuss the options with you and sort everything out.

1. Do the home equity check

Quickly check whether you’re eligible and how much equity you can release.

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2. Make an appointment

You can only take out the Home Equity Mortgage after seeking advice, so please make an appointment with an adviser or intermediary.

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3. Discuss your options

An adviser will discuss the options with you and sort everything out.

Home Equity Mortgage: pros and what to bear in mind

Pros

  • You don’t need to sell your home to release equity
  • You decide how you spend the money
  • Your property’s value is ring-fenced and you’re protected from incurring a residual debt after selling your property if you meet certain terms and conditions
  • We add the monthly payments for your Home Equity Mortgage to your mortgage debt
  • You can back pay all or part of the interest during the term of the mortgage, so that your mortgage debt rises less quickly.

What to bear in mind

  • Your mortgage debt will increase: the interest is added to the home equity you release. This means you can’t be certain about how much debt you’ll have in the future. Your current mortgage may also be classed in a higher rate category
  • If you have a mortgage with another provider, you can’t take out a Home Equity Mortgage while retaining your current mortgage However, you can refinance that mortgage with ABN AMRO. This means that you may owe early repayment charges to your current mortgage provider Ask your adviser for more information
  • Once you’ve taken out a Home Equity Mortgage, you’ll no longer be able to increase your mortgage.

Questions about the Home Equity Mortgage

If you can’t quite find the answer to your question or just have a quick question about the Home Equity Mortgage, don’t worry – we understand. Simply ask your question over the chat and get an answer in no time.

Frequently Asked Questions

Is the Home Equity Mortgage right for me?

The Home Equity Mortgage is right for you if:

  • you (and your partner) are aged 67 or older. If you (or your partner) are aged between 62 and 67 years old, you may be able to apply for a Home Equity Mortgage in certain situations. Discuss your personal situation with your mortgage adviser
  • they can tell you about your options
  • you have a relatively low income or pension, which prevents you from releasing your home equity in a conventional mortgage
  • you have no or very limited liquid assets available for your spending target
  • you have sufficient equity on your home
  • you are able to maintain your home to a sufficient standard
  • you can continue to live in your home as you grow older or if your health deteriorates.

The Home Equity Mortgage is not right for you if:

  • you won’t be left with enough home equity to finance a move to another owner-occupied home
  • you want to leave a certain amount of your home equity to your heirs and won’t have enough equity spare if you do
  • you want to take the money as a lump sum and pay yourself monthly instalments from that amount
  • you don’t want to take out another mortgage alongside a Home Equity Mortgage, and the amount of home equity you wish to release is lower than €30,000. In that case, the overall administrative and borrowing costs won’t be in proportion to the amount released
  • you have a mortgage that you’ll need to refinance with ABN AMRO, and the total costs for this are disproportionate to the home equity release from the Home Equity Mortgage -    you want to use a Home Equity Mortgage to make alterations to your home and claim tax relief on the mortgage interest
  • you want to take out a Home Equity Mortgage several times or increase your conventional mortgage in the future – this isn’t an option
  • you want lots of flexibility in terms of monthly payment instalments
  • you don’t want to seek advice about taking out the Home Equity Mortgage
  • you don’t have savings and want a monthly top-up of your income, but can’t afford the monthly borrowing costs or can’t cover them in a conventional mortgage.
What can I spend the released home equity on?

You’re free to use the money however you like, such as for the following:

  • a gift to a child or grandchild
  • to renovate your home or cover the costs of alterations to make your home suitable for you as you age
  • sustainable home improvements
  • topping up your monthly income
  • making a one-off large purchase, such as a car, caravan, boat or travel.
Why won’t my monthly payments increase?

We add the monthly interest on your Home Equity Mortgage to your mortgage debt. So you don’t need to pay off this interest monthly, but you can choose to pay it fully or in part. Each month, we calculate the interest on the entire amount of your Home Equity Mortgage – on the home equity released and the sum of the interest on the mortgage. As this means your overall mortgage debt is higher, your current mortgage may be classed in a higher rate category. If you choose to pay back part or all of the interest during the term of the mortgage, your mortgage debt will rise less quickly.

You must pay back the total Home Equity Mortgage to ABN AMRO only when:

  • your home is sold
  • you (and your partner, if you have one) move to a care home
  • you die, or when your partner dies if they outlive you.
How much interest do I pay on the mortgage?

The interest rate for the Home Equity Mortgage depends on several factors, such as the fixed-rate period you choose or whether you take the released equity as a lump sum or monthly instalments.

You can choose from three fixed-rate periods: 10, 15 or 20 years. If you’re aged below the state pension age, you cannot choose a fixed-rate period of 10 years.

At the end of the first fixed-rate period, you can also choose one of the shorter fixed-rate periods and benefit from a lower rate compared with the longer periods. View the current rates and choose Budget Mortgage and the Home Equity Mortgage.

What does the income test involve?

ABN AMRO uses an income test to calculate the amount of your Home Equity Mortgage. This test looks at factors like:

  • the outstanding amount on your current mortgage
  • whether you can afford your current mortgage payments under the current rules
  • your income.

This may reduce the amount of home equity you can release.

Can I claim tax relief on the interest on my income tax return?

As the Home Equity Mortgage is considered income from savings and investment, you cannot claim tax relief on the interest. The same applies if you use the money to make alterations to your home, though exceptions may apply. Please contact a financial adviser for more information.

Can I take out a Home Equity Mortgage and keep my current mortgage with another provider?

No, you can’t keep your mortgage with another provider. Your adviser can tell you whether ABN AMRO can refinance your current mortgage. If you choose to refinance your mortgage, you may owe early repayment charges to your current mortgage provider.

Ready for the future

Live in your home for longer

Renovate your house and stay independent for longer.

Increase your home’s energy efficiency

Use the Energy Saving Check to find out how much you could save.

Paying for care at home

Make sure you get the individual care and support you need.

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