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Did You Know? Every 12 minutes a homeowner over 55 in the UK unlocks £91,667 tax-free cash.
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Last updated 06 March 2020
Our Most Commonly Asked Questions
An equity release could be a great way to help you live your later life to the full.
By borrowing a tax-free lump sum you could be able to fund home improvements, help younger family members get on the property ladder, or simply keep your lifestyle in retirement.
How much you can borrow depends on a number of factors, including your age, the type of property you own, and its value.
Use our free equity estimator to find out how much equity you could release.
Discover what is an equity release?
When comparing the equity release market, a specialist adviser will explain:
- You have to get advice before getting an equity release.
- Check for plans that have a no negative equity guarantee, so you’ll never owe more than your house’s value.
- It reduces the value of your estate.
- The initial discussion is free with no obligation.
- The most popular form of equity release is a lifetime mortgage, which is a loan secured against your home. Note that you will still own your home.
Equity release is a way of releasing the wealth (cash) tied up in your property without the need to move.
With equity release products, if you are over the age of 55, you can either borrow against the value of your home or sell all or part of it for a regular monthly income, a lump sum, or the facility to get at equity as and when you like or a combination of these options.
Use our free equity release loan estimator to see how much you can release now.
Although there are many different plans available, they can all be split into four categories of equity release schemes.
You release a lump sum from the value of your property, by taking out a mortgage secured on your property (provided it is your primary residence) whilst sustaining 100% ownership of your home. This amount, plus any interest accrued, (you can choose to make repayments) is repaid from the sale of your property when you pass away or move into long-term care.
This works similar to Lifetime Mortgage but with a cash fund/draw down option allowing you to withdraw amounts at a frequency you want to a specified amount of years, or until the cash fund has been used up.
You get a lump sum and pay a monthly interest on the loan, which can be fixed or variable, rather than allowing the interest to roll up. The amount you originally borrowed is normally repaid when your home is eventually sold.
Here, you sell some or all of your property to a home reversion provider in exchange for a lump sum of money or routine payments, whilst retaining the right to living in your home, rent free, whilst you live, but you have to agree to preserve and insure it. At the end of the plan your property is sold and the sale proceeds are shared according to the proportions of ownership.
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Use our free lifetime mortgage calculator to see how much you can release now.
You are free to use the money on almost anything you choose. There are many reasons for release equity from your home and here are just a few of them.
Common Equity Release Uses:
- To supplement your pension income to cover living expenses
- To settle a repayment mortgage or clear the balance on an interest only mortgage
- To improve your life conditions
- To see your family enjoy their inheritance while you’re still here
- To carry out some home improvement
- To take that holiday of a lifetime
- To help your children onto the property scale
- To pay off other outstanding debt and lower your monthly outgoings.
Equity release plans are not right for everyone and it is important that you fully consider your options and receive independent financial advice before making a decision. It is also important that, if you do decide to use an equity release product, you pick one that meets your needs.
Remember that taking an equity release plan is generally a long term option. However, there are flexible plans available that may fit your varying needs and some will allow you to repay in the future without any penalties. A financial adviser can help you to a plan that is right for you.
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