Do you really WANT to downsize?

Downsizing as a method for repaying a mortgage can sound like a perfect plan when the decision is years ahead. The reality is that in many cases, when the time comes, clients do not actually want to leave their homes. Equity Release could be one if the options to explore if it seems that moving is the only alternative:

‘New research from Bower Retirement shows that nearly one in five would-be downsizers change their minds and decide to release property wealth through equity release. The main reasons for not going ahead including the cost of moving, with 55% of Bower advisers saying customers change their minds because of the expense. Emotional reasons are also a major issue for not going ahead with downsizing with around half of Bowers’ advisers saying clients did not want to move away from family and friends. Andrea Rozario, chief corporate officer at Bower Retirement, said: “Downsizing is logical and sensible and can work for some over-55s homeowners, but only if they can find the right house at the right price. But there are financial issues to deal with when moving house with stamp duty alone costing 5% on house prices above £250,000 which can make the decision to move uneconomic. Buying a £300,000 home would cost around £5,000 in stamp duty. It is also not just a financial calculation as there are emotions involved when moving home with the risk of losing touch with family and friends making downsizing seem a bad idea for many.” ‘

(What Mortgage, June 2017).

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