Equity Release Uses

12 MOST COMMON Uses of Home Equity Release

Top Equity Release Uses. Here are the Most Important Ways to Utilize the Growing Equity in Your Home. Unlock Your Tax-Free Cash with Equity Release.

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Equity Release Uses

Imagine having the key to unluck all your bucket list dreams?

Based on the latest real estate analysis reports, older homeowners have recently seen their estates’ value grow by almost £14 billion!

Could you be holding a piece of that pie?

If you’re not careful, you could be sitting on a goldmine and not even know it! That’s where equity release comes into play.

We’re here to inspire you with:

  • The most common uses of equity release.
  • How equity release can be life-changing for homeowners over 55.
  • How equity release can help you secure a better financial future.

We’ve spent hours researching over 18 plan providers and examining statistics unpacking the top equity release uses in 2021. What we’ve discovered could be life-changing for you and your family.

Do you have an idea of what you could spend this kind of income on? If not, here are 12 fantastic uses for equity release to inspire you. Continue reading to find out more!

What You MUST Know

Before you continue reading, we’ve summed up the most important information about equity release in this quick video. Check it out:

Find out more: How Your Medical Condition Can Give You a Better Equity Release Deal

Ideas on How to Use Your Cash Released

As housing prices continue to rise, many pensioners could be earning an average of over £1,000 every month. Those who own their homes outright could have at least £3,100 tax-free cash from each of their estates in the past 3 months, taking their estate wealth to a record high.

Are you looking to release equity from your home and need inspiration on how to use it? The question is, how can you improve your life?

The great thing about equity release is that you can use the income in any way you wish.

Here are 12 ways you can use equity release to help live the retirement of your dreams:

Invest in Home Improvements

1. Invest in Home Improvements

Have you always dreamed of upgrading parts of your house?

You can use the equity released from your property to pay for renovations. By doing so, you are not only allowing yourself to live out your retirement in your dream space, but you are also increasing the resale value of your home.

Check out: Why Equity Release Is a Brilliant Choice

Cater for Your Care Home Expenses

2. Cater For Your Care Home Expenses

Moving into a care facility can be a great way to retire for some. However, many prefer to live out their golden years in their life-long home.

Does this sound like you?

In this case, you can consider using equity release to pay for in-home geriatric care, should the need arise.

In addition, you might not need personal care but could do with a hand. Perhaps you could use the funds to hire someone who can help with daily domestic chores.

Purchase Mobility Equipment

3. Purchase Mobility Equipment

When it comes to mobility care, you should be able to get a grant from your local authorities. However, this is likely not enough to pay for the most high-tech products available on the market.

With equity release plans, you can achieve a greater level of comfort by adapting entryways, getting high-quality stairlifts, buying adjustable beds, reclining chairs, mobility scooters, and anything else that’ll help make your life easier.

Pay Off the Mortgage

4. Pay Off the Mortgage

Have you been searching for ways to clear your house mortgage but don’t know where to start? Well, according to the Financial Conduct Authority,1 28% of homeowners who released equity in 2019 used it to clear their existing mortgages.

You can also do away with your mortgage in the same way. By taking out the equity that’s tied up in your property, you can pay up your remaining mortgage and get to enjoy the spare cash as you wish.

As per the equity release contract, you must pay off your mortgage before spending the cash you released from the value of your estate.

Also, check out: How Reverse Mortgages Make Your Life Easier

Clearing Debts

5. Clearing Debts

Have you been facing any difficulty trying to keep up with your lines of credit or struggling to pay your debts? Some debts can be very costly, and if you can’t pay them off quickly, consider equity release to free up some cash.

Have a look at these rates of interest. If the interest rate on your equity release plan is lower than that of your line of credit, then, in the long term, equity release could mean more of your estate is left intact.

As always, you need to ensure that you discuss these terms with an independent financial adviser to understand all the comparative risks and costs.

Find out more: Economic Realities of the Pandemic

Investment Your Cash

6. Invest Your Cash

According to research, over 30% of those who release equity use it to fund their business ideas or buy shares. With the sole purpose of turning cash into even more money, they use the equity tied up in their homes to make the most of attractive investment opportunities.

That said, if you have any lifelong dreams like opening up a restaurant, investing in agriculture, or growing your current business, then equity release can help you actualise these plans.

Looking to invest? Get tips on how to make your money work for you here.

Help Your Friends and Family

7. Help Your Friends and Family

With one financial crisis after another, you might want to help your family with rising expenses. Lucky for you, with equity release ventures, like the home reversion plan or lifetime mortgage, you can release funds to help your children and grandkids.

Moreover, with the estate values rising every day, it might make sense to help them now instead of waiting for their inheritance.

Find out more: Giving Your Family an Early Inheritance

Go on an Ideal Holiday

8. Go On an Ideal Holiday

Do you have family overseas that you would like to visit? Or perhaps you have a dream destination on your bucket list?

Remember, you only live once!

By freeing up the money in your home, you can turn this fantasy into a reality. With equity release, you can choose to receive a larger lump sum to fund this trip.

Boost Your Income

9. Boost Your Income

Sometimes your pension savings is simply not enough to keep you going.

With life expectancy on a 0.08% increase since 2019, many people live longer these days, putting pressure on you to have enough money to keep going until the end.

Equity release can help boost your pension and make your retirement vastly more comfortable.

Get more information on: How Experienced & Business-Savvy Influencers See Potential in Every Corner

Buy Your Second Home

10. Buy Your Second Home

Whether it means spending your holidays by the beach or having another asset to leave to your family, owning a 2nd home is something most people aspire to. It’s probably why many homeowners are using their equity release for this purpose.

For legal purposes, though, financial experts advise their clients to consider being the sole occupants of their 2nd home or letting it out for a maximum of 4 weeks consecutively. You must also use the estate for a minimum of 4 weeks every year and should have no formal agreements or Assured Shorthold Tenancy in place.

Another alternative is to invest in a buy-to-let property and use the extra rental money to supplement your pension pot.

Considering a second mortgage? Find Out How Much You Can Get

Buy Out Your Partner/Spouse

11. Buy Out Your Partner/Spouse

Over 100,000 divorced couples in the UK are struggling with how to divide their assets and savings. One of the most stressful parts is figuring out who will keep the marital home.

If no one wants to stay or can’t afford to purchase the other out, most people have been opting to sell the house and split the proceeds. However, if you don’t want to sell, taking out an equity release plan is the best option for you.

It enables you to free up some cash and helps in buying out your partner, thus making the divorce process less stressful.

Purchase New High-Value Items

12. Purchase New High-Value Items

If you’ve been feeling left out in terms of technological advancements or the modern-world lifestyle, or you need an urgent upgrade, equity release can help you get modern devices, clothes, and other belonging.

People these days are living longer than ever before, meaning that you have more time to enjoy your hard-earned retirement.

Got Questions? Check These First

What Can Equity Release Be Used For?

Can Equity Release Pay Off a Mortgage?

Can You Use Equity Release to Fund Your Care?

What Do People Spend the Equity they Release on?

In Conclusion

By unlocking some of the equity in your home, you can make your retirement even more worthwhile. Having cash to spend can make your dreams come true.

It is, however, important to make an informed decision about whether or not equity release is right for you. Have a look at the equity release alternatives before you make your final decision.

You might want to try out our calculator to find out how much equity you can release from your home. This financial decision might be the answer that you have been looking for!

How Much Can You Release?

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  1. Sources and uses of equity extracted from homes
    2007 Oxford Review of Economic Policy Volume: 24, Issue: 1, pp 120-144 DOI: 10.1093/OXREP/GRN003
    Alan Greenspan 1,James Kennedy 2
    1 Greenspan Associates LLC,2 Federal Reserve System 123456
  2. Developing Equity Release Markets: Risk Analysis for Reverse Mortgages and Home Reversions
    2014 The North American Actuarial Journal Volume: 18, Issue: 1, pp 217-241 DOI: 10.1080/10920277.2014.882252
    Daniel H. Alai 1,Hua Chen 2,Daniel Cho 3,Katja Hanewald 1,Michael Sherris 1
    1 University of New South Wales ,2 Temple University ,3 Suncorp Life, Sydney, Australia 123
  3. Can equity release help older home-owners improve their quality of life?
    2010
    Jerome Billeter 1
  4. Home equity release for long term care financing: an improved market structure and pricing approach
    2015 Annals of Actuarial Science Volume: 9, Issue: 1, pp 85-107 DOI: 10.1017/S1748499514000268
    Doug W. Andrews 1,Jaideep S Oberoi 2
    1 University of Waterloo ,2 University of Kent 1234
  5. Pensions and housing wealth: Quantitative data on market conditions for equity release schemes in the EU
    2016 Thuenen-Series of Applied Economic Theory
    Peter Hennecke ,Pierluigi Murro ,Doris Neuberger ,Flaviana Palmisano 1
  6. Attitudes towards housing equity release strategies among older home owners: A European comparison
    2021 Journal of Housing and The Built Environment pp 1-20 DOI: 10.1007/S10901-021-09823-2
    Joris Hoekstra ,Kees Dol
    Delft University of Technology 12
  7. Housing equity withdrawal: uses, risks, and barriers to alternative mechanisms in later life
    2013 Australian Housing and Urban Research Institute Final Report Series Volume: 153, Issue: 217, pp 1-101
    Rachel Ong ,Therese Jefferson ,Gavin Wood ,Marietta Haffner ,Siobhan Austen 12345
  8. Home Equity Release for UK Seniors: A Twenty-First Century Product Design
    2017
    Doug W. Andrews ,Jaideep S Oberoi 1
  9. Over-65s Increasingly Use Equity Release to Pay Off Debts
    2020
    Peter Adams 1
  10. Home Equity Release Loans for Long Term Care Needs
    2015
    Doug W. Andrews ,Jaideep S Oberoi 1

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