Relative new comers to the equity release scheme market are the Landlord equity release schemes. This scheme as the name suggests is orientated towards landlords. It provides the applicant a cash lump sum that is tax free. The value of this lump sum is determined by the overall value of the property investment as well as how old the applicant is.
The start age for plans such as these is 55 and is applicable to a landlord of this age with a maximum of five rental properties. The landlord can raise funds from these properties. This system is called the buy to let mortgage market.
In this system there are no set dates of repayment nor are there monthly repayments as with a traditional mortgage. The loan that has been taken out against the property or properties is repayable upon the sale of the property which occurs when the borrower passes away or moves out.
The question of how much a landlord could borrow or release from their property is determined by the age of the applicant who is the youngest, as well as, of course the value of the property. It is worked out through a percentage system.
We are all more familiar with traditional equity release schemes and the let to buy plan works in essentially the same way. The applicant will borrow money, and the interest of that loan accrues monthly and is then repayable upon sale of the property.