# Lifetime/Equity Release Mortgages



## Bicky

Anyone any experience of Lifetime or Equity release mortgages in Portugal. I am a pensioner, own my home and would like to release some of the equity. To sell and downsize is a costly excercise.


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## canoeman

Are they available here? not sure, but from experience in UK unless you really need to don't, they all have payback clauses that are strict and extremely expensive, ok not for you but for your family.


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## Bicky

Thanks for this - worth knowing. if necessary might consider a small interest only mortgage.


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## canoeman

You really need to seek advice from your bank or a bank, mortgages operate differently here as in the lender becomes a co-owner in the property, so terms and conditions are very different to a UK mortgage.
A simple loan might be the easiest option, but of course it depends on the sort of amount you want to raise.


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## Frank Wilson

We have looked into it for our UK property but as we are still relatively young the percentage of the overall value they would offer was less than a third and the cost of paying that back from the eventual sale of house was frightening.


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## init4theinfo

there are not any specific lifetime release mortgages available at the moment. Equity release mortgages are difficult as well, it will depend on your income, your age and your reason (as well as many other things). My advice to you is to have a coffee/chat with specialist in the Market, to discuss what your options are.


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## Bicky

Thanks for your input - no decisions made yet. Have several enquiries out - see what they bring in. At the moment there is no desperate rush , just trying to plan for possible future eventualities, with pensions fixed, outgoings spiralling upwards. Equally at death pension income for my wife is reduced to non sustainable levels.


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## canoeman

Think your being very wise, but if you did do a Equity release and died prior to your wife, personally I think she'd be in a worse scenario.

Whatever you decide you should look at life insurance carefully for both of you, it would more than likely be compulsory but you might find premiums high.


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## Bicky

Hi - regarding life insurance - I am insured so my wife is protected until I reach 80 !! - then it closes down. I am 71 at the moment!. There is no insurance on her life, mainly because my pensions remain in operation. I have been told provisionally by the Bank that I could qualify for a small ( £50000 ) mortgage, as long as this is repaid by the time I am 80. there is plenty of equity in our home.


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## canoeman

£50000 over 9 years repaying what +£500 a month not really equity release, I think they would insist your wife was insured and might not accept your insurance, please please look at all angles before you make a decision.

I would think you best option would be to sell and downsize.


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## Bicky

We will have to see what offers - if any are on the table. Problem with selling - if you can !! - is the dead money costs.
Estate Agents, Capital gains Taxes, Legal fees, Taxes on new property purchase. Plus relocation costs both the physical move plus furniture and fittings.


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## canoeman

There is no CGT tax if your selling your primary home in Portugal and rebuying or investing in another primary home in the EU, the law was changed some time ago now. 

Yes you have commission to pay selling and tax to pay buying but the difference is yours, my late father in law unbeknown to me at the time was persuaded to take out an equity release with a reputable UK Insurance company from Norwich, a £16000 release cost £756 in charges, and although he died within 3 years the repayment was just over £27000.


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## Bicky

On the CGT front - unless I am mistaken - you have to reinvest the total gain or pay tax on the difference. You take the purchase price, selling price, add a few indexing coefficients deduct allowable expenses, then reinvest the total within 2 yrs or pay taxes on the difference. If the law has changed can you please tell me when. My last move 5 Yrs ago cost me several thousand Euros !. With all the austerity measures and attempts to gain revenue, I would be surprised at any relaxation on CGT rules.


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## canoeman

Re invest within 3 years not 2 and yes you have to reinvest gain after allowable deductions but you'd have to have bought very cheaply and sold at a whopping profit to pay any CGT, and your original capital is not taxed.

Not certain of when Portugal did actually come kicking and screaming within EU guidelines but certainly within the last 2 or 3 years, maybe a bit longer. It's very clearly stated in their tax guide.


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## init4theinfo

There are so many issues and questions arising from your comments, pensions, mortgages, insurance, I would really suggest talking to someone that understands all areas mentioned, I would like to comment further here but the advice would be general and not exact to your needs. Most IFA's will not charge you just to have quick chat so suggest you just give one a call.


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## Bicky

Thanks for this -as I have said I have several enquiries out with Advisors - when I have some offers I will consider any future move. Might be that I do nothing. Not desperate at the moment.


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## init4theinfo

Okay, good luck with it all.


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## Bicky

Perhaps when I have the offers in you would allow me to send you a personal message - for your views on this issue.


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## init4theinfo

Feel free.


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## Bicky

O.K. Guys - we have a solution which is just what we wanted, So all in all a good result all round. .

If anyone is interested I can give you the Blow by Blow account of the happenings, in a personal message, don't want to advertise to the world in open forum.


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## init4theinfo

I would be interested on a professional level. Glad you sorted it out.


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