58 Equity Release Jargon Terms Explained in 2025
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- The most common equity release terminology includes key phrases like 'lifetime mortgage', 'home reversion', 'compounded interest', 'annual percentage rate (APR)', and 'no negative equity guarantee'.
- To better understand equity release jargon, reading comprehensive glossaries and guides on trusted websites like SovereignBoss can be helpful.
- A 'lifetime mortgage' refers to a long-term loan secured against your property, which is only repaid when you die or move into long-term care.
- Typical terms used in equity release schemes include 'drawdown', 'lump sum', 'enhanced plan', 'voluntary repayment', and 'interest roll-up'.
- 'Home reversion' means selling a portion or all of your property to a reversion company in exchange for a tax-free cash lump sum, while retaining the right to live in the property rent-free.
If you are looking to unlock some of the value tied up in your home, you will probably have discovered some equity release jargon whilst doing your research.
What Is Equity Release?
Let's dive into a practical equity release example: Suppose you own a home valued at £300,000 with no outstanding mortgage.
By opting for an equity release product, you could potentially unlock a portion of your home's value as a lump sum or as additional income.
This is particularly beneficial if you're exploring ways to enhance your financial flexibility during retirement.
Equity release in England and across the UK is regulated, ensuring you receive fair advice and transparent terms.
This financial strategy, including equity release loans and equity mortgages, provides a pathway to securing funds based on your property's value without the immediate need to sell it.
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