EQUITY RELEASE
Equity Release Specialists
If you’re 55 or over, equity release lets you unlock some of the value tied up in your home, without having to move out or make monthly repayments. It’s a big decision though, and not the right option for everyone, so we’ll talk you through it honestly before you decide anything.
A lifetime mortgage is a long-term commitment which could accumulate interest and is secured against your home.
Equity release is not right for everyone and may reduce the value of your estate.
What is equity release?
For many people, their home is their most valuable asset. Equity release lets you unlock some of that value, and it’s something a growing number of people over 55 consider as part of planning for retirement. If you’re eligible, you can withdraw funds from your home without needing to make monthly payments.
There are two main types of equity release: lifetime mortgages and home reversion schemes. With most products, you can take a lump sum, or draw smaller amounts over time, while still living in your home. There’s a wide and growing range of products available, so there’s usually something that fits most people’s circumstances, though as you’ll see below, that doesn’t mean it’s the right choice for everyone.
Monthly payments are usually optional. If you don’t make them, interest continues to be charged and is deducted when the property is eventually sold.
What can equity release be used for?
Equity release can be utilised for a variety of purposes, including:
- Adapting or upgrading your home so you can stay there for longer
- Paying off outstanding debts, such as a mortgage, credit cards, or personal loans
- Paying for help around the house, such as care at home
- Topping up your pension income or improving your day to day quality of life
- Buying a car or covering another major purchase
- Helping a child or grandchild with university costs or a house deposit
How a lifetime mortgage works
A lifetime mortgage is the most common type of equity release, and it’s worth understanding how it works. You keep full ownership of your home, and any interest on the loan can either be paid as it accrues, or rolled up and paid at the end. When you die, move into permanent long-term care, or, for couples, when the last person living in the home does either of those things, your estate repays the loan and any outstanding interest.
How much you can borrow depends on factors like your age, health, and the value of your home. Lifetime mortgages are generally only available to people aged 55 and over.
If you decide to go ahead with either a lifetime mortgage or a home reversion plan, you’ll also need to take independent legal advice.
Equity release questions we get asked a lot
What is equity release?
It’s a way to unlock some of the value tied up in your home if you’re 55 or over, either as a lump sum or in smaller amounts, without needing to move out or make monthly repayments.
What's the difference between a lifetime mortgage and home reversion?
A lifetime mortgage means you keep full ownership of your home while borrowing against its value. Home reversion means selling part or all of your home in exchange for a lump sum or income, while retaining the right to live there. Lifetime mortgages are the more common option.
How much equity can I release from my home?
This depends on your age, health, and the value of your property. Generally, the older you are, the more you may be able to release. We’ll talk through the actual figures for your circumstances rather than a generic estimate.
How long does equity release take?
It varies depending on your circumstances and the provider, but it typically takes longer than a standard mortgage application, partly because independent legal advice is a required step. We’ll give you a realistic timeframe once we understand your situation.
Will equity release affect my benefits?
It can. Releasing equity may affect your entitlement to means tested benefits, which is one of the reasons independent financial and legal advice is required before going ahead. We’ll flag this clearly as part of your advice.
Do I need a broker for equity release?
Yes, in practice you’ll need to work with a qualified adviser, and taking independent legal advice is also a requirement. Going whole-of-market means we can compare products across providers rather than a single lender’s range.
Thinking about releasing equity from your home?