Equity release to generate income NOW?

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Can I invest €200k of equity from family home in another investment to give me income now?

My requirement is:
* I need to supplement my regular income, which is too low to support family at this time.
* I need the income now, not in 5-10 years.
* I have the asset to do this - the family home with LTV of below 25% and therefore can release €200k easily without bringing LTV above 50%.
* If I release the €200k on interest only, I will have to pay it back @ 4.5% pa. Therefore I need investments which will pay me back the 4.5% ... and then some, to make the exercise worthwhile.
* I'm 40 and therefore could make the equity release stretch out 20 years until I am 60.

Is there any financial adviser there with advice?
 
Thanks Clubman.

Following the "borrowing to invest in shares" idea, what 'share' products are open to me that will give me income on an ongoing basis to service my debt ... or can I somehow roll up my debt until a later time?

Thank you
 
I'm not recommending borrowing to invest in shares. Personally I would not do it. But if you do decide that this is appropriate for your specific situation then any low charges unit linked fund could fit the bill with you encashing units along the way to generate income. Of course you will be depending on this not eroding the original capital value or undermining the income generation possibilities going forward.
 
I also do not recommend investing in shares due to the risk involved. By risk I mean the fact that you will need the shares to rise in value by the 4.5% you are paying on your mortgage before you even break-even. Based on past performance (although, as has been said many times before on the forums, past performance gives no indication to future performance) of the ISEQ which has more than doubled over the past few years, this strategy would have worked well. However, it is equally possible that the ISEQ may lose alot of value over the next few years. If, in possibly the worst case scenario (however unlikely), the value halved after 4-5 years and you decided to bail out and pay the share proceeds off your mortgage, you would be left with a LTV of around 35-40% at 45 as opposed to the current LTV of 25% at 40. The fact that you will be taking an income from your investments as opposed to reinvesting dividends makes this scenario all the more likely. However, if you're willing to take this risk, the upside is that whatever stockmarket you invest in could continue to rise at it's current rate and you could be paid off very handsomely. Just remember that stockmarkets tend to work in cycles and most stockmarkets are now at all-time highs.

On an unrelated topic, if you are currently paying 4.5% on your mortgage you should look into switching to [broken link removed] who released a very competitive mortgage to the market in the past few weeks. They will pay the costs associated with switching and the rate will be 3.75% for you. This is a saving of 21 euros per month per 100,000. Judging by your figures above, you're current mortgage is around 200,000 so switching will save you 42 euros a month. It doesn't sound much but if, as you say, your regular income is too low to support family at this time, it will be a good start.
 
All based on the assumption that the highest rate you'll ever be charged is 4.5%, at any stage over the next 20 years.

In short, you'll be borrowing with guaranteed costs to invest in something with non-guaranteed returns.

You have an €800k+ house - if you really can't afford it you'd probably be better finding another house which suits your needs but is less expensive. As you still have mortgage outgoings, you're effectively borrowing to meet those repayments.
 
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