Equity Release for Expats in 2025: What You Need to Know
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Key Takeaways...
- To avail of this financial option in the UK, expats must be over 55, own a UK property worth at least £70,000, and reside in the house for at least six months per year.
- Expats can benefit by accessing a tax-free lump sum or regular income from their property while retaining residency rights.
- Currently, no specific plans are designed solely for expats, but many standard options can accommodate them depending on their circumstances.
- The main risks include potential reduction in inheritance, impact on means-tested benefits, and the possibility of rising interest rates.
- Expats living outside the UK can proceed, provided they meet the eligibility criteria and can prove substantial residency in their UK property.
Find out why equity release products are on the rise for UK expats1.
If you are one of these homeowners - an equity release product could be the best way for you to get your hands on funds that are tied up in your property.
In This Article, You Will Discover:
Our expert team of researchers constantly scans the equity release market to bring you the most current information on everything related to equity release.
Find out more about equity release and expats below.…
What is Equity Release and How Does it Work?
Equity release is a form of borrowing that allows homeowners, 55 years and older, to access money tied up in their property and use it for other needs.
There are two primary types of equity release; lifetime mortgage and home reversion plans, the latter being less common.
Lifetime Mortgage
A lifetime mortgage is a type of loan that you take out against your property. The loan only gets paid back once you, the homeowner, passes away or moves into long-term care.
In this instance, the homeowner retains full ownership of the property.
Home Reversion Plans
Home reversion plans work by selling part or all of your property to an equity release provider in exchange for tax-free money.
This means that:
When the property is sold, once you pass away or move into long-term care, the portion that is owed to the equity release provider will be settled.
In both instances, the homeowner still has the right to reside in the property for life.
An important factor to consider is that if you decide to release equity, you will not be able to use your home as security for any future borrowing.
What is an Expat Mortgage?
Expat mortgages refer to loans you would take out on a property in the UK whilst you are living abroad as a UK national - in other words, as a UK expat.
Do Expats Qualify for Equity Release?
Yes, expats can qualify for equity release provided they meet the qualifying criteria.
As an expat, the criteria you need to worry about meeting is the property must be used as your primary residence with you spending at least six months of the year living in it.
So, if you are over 55, own the property in question and spend at least six months of the year living there, then equity release could certainly be an option for you.
How Does Equity Release Work for Expats?
Equity release for expats works in the same way as with UK residents.
Unlike the average mortgage, equity release gives the homeowner peace of mind that no repayment must be made on the loan until the property is sold.
This will usually happen when the property owner passes away or moves into long-term care.
The amount that needs to be repaid will be the capital loan plus the interest that has accumulated over the loan term.
An important consideration is the compound interest. If no partial repayments are made then the interest compounds and rolls over, meaning that it can grow quite considerably over the lifetime of the loan.
Whether you are an expat or a UK resident, it is important to discuss your equity release plans with a financial advisor.
The downsides you will need to consider include the effect equity release can have on the inheritance you wish to leave behind, as well as the possible impact it can have on your means-tested benefits.
Your advisor will run through all the pros and cons and be able to recommend a plan best suited to your circumstances.
Common Questions
Can You Lose Your House With Equity Release?
What is the Eligibility Criteria for Expats to Avail Themselves of Equity Release in the UK?
How Can Expats Benefit from Equity Release in the UK?
How Long Do I Have to Live in the UK Before I Can Get a Mortgage?
Are There Specific Equity Release Plans for Expats?
What are the Risks Involved in Equity Release for Expats?
Can Expats Living Outside the UK Avail Themselves of Equity Release?
How Popular Is Equity Release in the UK?
Is Equity Release a Safe Option?
In Conclusion
Equity release is an excellent way for homeowners to borrow money without worrying about repayments.
Bear in mind, however, that equity release is not for everyone and the pros and cons must be thoroughly discussed with a qualified financial advisor.
Equity release products may be on the rise for UK expats as it could be a means for them to access the money tied up in their homes to meet their financial goals and obligations.