This tool is a financial instrument used to estimate the potential outcomes of a specific type of loan designed for homeowners aged 55 and over. It simulates the process of accessing funds from the accumulated value of a property, specifically in increments as needed, rather than a single lump sum. For example, a homeowner might use the calculator to determine how much they could withdraw each month, or in larger, less frequent amounts, while projecting the impact on the overall loan balance over time.
Its significance lies in offering greater control and flexibility to borrowers. By projecting future loan balances and available funds, it aids in informed decision-making, potentially minimizing interest accrual compared to taking a large sum upfront that may not be immediately needed. This type of planning has become increasingly relevant as individuals seek ways to supplement retirement income and manage long-term care costs, whilst remaining in their homes.
