Jargon Buster

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Family
You should always consult all your immediate or close family members so that they are aware of the full implications of an Equity Release plan right at the start.

Financial Services Authority (FSA)
The FSA is an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000. From 31-October 2004, the FSA regulates the mortgage market. This includes Equity Release Lifetime Mortgages. In approximately April 2007, the FSA has also regulated Home Reversion plans.

Fixed Interest Rate
These offer borrowers a guarantee of what their mortgage payments will be for a set period of time. In the UK most fixed mortgage rates are fixed for a period of 1 - 10 years. After the fixed period the rate will generally revert to the lenders standard variable rate. Advantages: Convenient for budgeting as you know how much your payments will be. Also, you will be insulated from any significant upward swing in mortgage rates. Disadvantages: You run the risk that mortgage rates generally will fall below the level at which you fixed. Also, fixed rate deals often involve the borrower agreeing to a penalty charge - often up to six months interest - if they decide to redeem or repay the mortgage early. Other options include mortgages that are: variable rate, capped or discounted.

This site is for UK residents only