Equity Release

Equity Release Mortgages

Smart Strategies for Equity Release, Where to Find the Best Plans & Save Money in This Difficult Time.

How Does Releasing Equity From Your Property Work?

Do You Want to Learn More About Releasing Equity from Your Home? Get EXPERT Equity Release Advice & Get Equity Release Explained Simply.

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Don’t lose out on a golden retirement opportunity!

Retirement is around the corner.

By not acting now, you could find yourself in a situation where you’re left strapped for cash, with nowhere to turn.

Over £4.8bn was released in 2021, and 2022 appears to be another record-breaking year.

Now’s the time to access your share of this financial opportunity.

We’ll unlock:

  • The secret to using these products safely and correctly.
  • An introduction to how to release equity could change your life.
  • The types of equity release available in 2022.
  • A comprehensive guide on how equity release works.

With more than 10 expert consultations and many hours spent engrossed in researching over 220 plans, we’re in the ideal position to help you figure this out.

Perhaps an equity release mortgage could be the solution you’ve been looking for?

Continue reading to find out more NOW!

Equity Release

What’s Equity Release?

Equity release is a loan secured against your estate’s value, while still living there.

You can release money as a lump sum, a drawdown, a combination of both, or a regular income.

How Does Equity Release Work?

Equity release mortgages work by the loan and compound interest being repaid when the last homeowner dies or goes into long-term care.

This is usually done from the sale of the home in question.

What Are the Equity Release Options?

The 2 most common equity release loan types in May 2022 are a lifetime mortgage and a home reversion plan.

It’s essential to understand the details of both plans to decide which works best for you.

How does equity release work with a home reversion scheme and a lifetime mortgage?

Let’s take a look!

  • Lifetime Mortgage – a lifetime mortgage is the most common form of equity release product, which allows you to secure the loan against your primary residence, still own it, and still live there. It’s tailored to run for your lifetime, with no repayment requirements in your lifetime. However, you can volunteer to pay back the interest and some of the loan. Otherwise, it will be covered from your property sale when you pass away or go to long-term care.
  • Home Reversion – with a home reversion plan you raise money by selling all or part of your home below market value to your home reversion provider, while continuing to live in it rent-free until you die or relocate to long-term care.

Who Can Get Equity Release?

To be eligible for equity release, you need to meet the following equity release criteria:

  • You must be at least 55+. In some cases, the plan might require you to be 60 or 65.
  • If there are 2 or more homeowners, the youngest needs to be 55 or older.
  • You need to own your home.
  • You should have no or only a small mortgage left on your property.
  • Your property must be located in the UK.

Getting Advice

It’s essential to get the best financial advice from an equity release adviser, to help you through the journey.

They will answer your burning questions, guide you on the process, and help you find the perfect plan to suit your needs.

You can find a financial adviser by:

  • Searching for available professionals around you on Google.
  • Searching on the Equity Release Council’s website for lifetime mortgages and home reversion schemes.
  • Looking at your local media outlets and notice boards.
  • Asking friends and family members for personal referrals.
  • Via searches on social media channels.

Pro Tip: Look for someone who specialises in lifetime mortgages and equity release schemes.

It’s acceptable to meet with a few advisers until you find the right one.

You must trust the person you work with, as they’ll be guiding you through your money-based decisions.

Advisers will differ according to experience, education, and specialties.

However, all advisers fit into 2 categories:

  • Some are ‘whole of market’ financial advisers. They will review all lifetime mortgages and home reversion products and plans available on the market and will find the best option for your home.
  • The other type, ‘restricted advisers’, work with limited providers and plans, ones that suit most of their clients. They will recommend you a suitable plan based on one of these.

It is advisable to look for a whole market adviser as they have a broader, holistic range of providers and plans to choose from.

In addition, you get Mortgage Only Advisers and Independent Financial Advisers (aka IFA’s); both can advise on equity release plans.

How Much Equity Can You Release?

The amount of equity that you can release depends on:

  • Your and your partner’s age,
  • the condition of your health,
  • and the value of your property.

Your property will be required to undergo a detailed and up-to-date valuation, to determine its value and condition.

Using our equity release calculator is a simple, stress-free process.

All you’re required to do is give your estimated home value. You’ll then need to provide a few personal details.

Is Releasing Equity Right for You?

Whether equity release is the best option for you depends on your circumstances such as:

  • your age
  • your income
  • how much money you want to release
  • your plans for the future.

The biggest pro of equity release is your accessing tax-free cash from your property, while still being able to live there.

The biggest con is that you’ll get less than the full value of your estate, and leave a smaller inheritance.

NOTE: The money you receive from equity release might affect your entitlement to state benefits, so check this first!

With that, here’s read about the 7 advantages and the disadvantages to determine if equity release is a good idea?

Interest Rates & Costs

There are equity release costs, which include:

  • Equity Release Advice Fees – You’ll need to hire an independent financial adviser who’ll guide you throughout the equity release process, which is an essential equity release cost.
  • Equity Release Application & Arrangement Fees – With most lenders, you’ll need to pay an application fee when releasing equity. These funds can be settled with some of the money you unlock.
  • Equity Release Surveyor’s Fees – During the process, you will need to have a surveyor give your home a detailed valuation.
  • Equity Release Solicitor’s Fees – With all loans, you’ll need a solicitor as a part of the process. They’ll take care of all the legal aspects of equity release.
  • Compound interest – The compound interest is usually repaid when the homeowner eventually passes away or instead enters long-term care.

Equity release interest rates were extremely low in March 2021, but have since risen.

They are still lower than years earlier, but expect to continue to rise until 2024.

Therefore, now’s the best time to unlock an equity release product.

Home Income Plans

Home income plans are a relatively new type of equity release tool that allows you to use the money unlocked to purchase an annuity that provides a guaranteed monthly income for the rest of your life. 

To qualify, you must be over 55 years of age and own your home.

Your provider can tailor the income you receive according to your needs, and you can use it to top up your retirement earnings.

Speak to your financial advisor to decipher whether the plan will impact your means-tested benefits. 

Like other equity release products, your monthly pay-out is seen as a loan and not a salary, so the amount will be tax-free.

Got Questions About Equity Release?

What Does Equity Release Mean?

Is Equity Release a Mortgage?

Where Will I Live With Equity Release?

How Do I Find an Independent Financial Adviser?

Should I Go for an Independent Adviser or a Direct Provider?

How Much Money Do You Really Get From Equity Release?

What Will Impact the Amount of Equity I Can Release?

In Conclusion

While releasing equity from your home might seem the perfect answer for you, it’s essential to weigh up all the advantages and pitfalls before choosing if equity release is the right financial product for you.

If your pension and other businesses cannot help you maintain or improve your lifestyle, then it’s an excellent option for you, and worth any risks involved.

As long as you own your home and are over the age of 55, there is a good chance there will be an equity release scheme available for you.

There are no limitations on how you can use the money and you will not have to worry about making repayments or losing your home.

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Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

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rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
John Lawson

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
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Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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