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What are the Benefits?
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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 08 June 2020
Our Most Commonly Asked Questions
- You have to get advice before deciding to get one.
- Check for plans that have a no negative equity guarantee, so you’ll never owe more than your home’s value.
- It reduces the value of your estate.
- The initial counselling is free with no obligation.
- The most popular form of equity release is a lifetime mortgage, which is a bond secured against your home. Note that you will still own your home.
Although there are many different plans available, they can all be split into four categories of reversion mortgage schemes.
Lifetime Mortgage Loan
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 retaining 100% ownership of your home. This amount, plus any interest accrued,4
(you can use to make repayments) is repaid from the sale of your property when you pass away or move into long-term care.
Drawdown Lifetime Mortgage
This works similar to Lifetime Mortgage but with a regular cash reserve/draw down options allowing you to withdraw amounts at a frequency you like up to a specified amount of years, or until the fund has been used up.
Interest-Only Lifetime Mortgage
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 settled when your home is eventually sold.
Home Reversion Plan
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 keeping the right to keep living in your home, rent free, while your still alive, but you have to agree to retain and insure it. At the end of the plan your property is sold and the sale proceeds are shared according to the residual proportions of ownership.
Not Looking For a Home Reversion?
Use our free equity release calculator to see how much you can release now.
Common Home Reversion 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 standard of living
- To see your family enjoy their inheritance while you’re still here
- To carry out some home improvements
- To take that holiday of a lifetime
- To help your children onto the property ladder
- To pay off other outstanding debt5 and lower your monthly outgoings.
Home reversion 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 a home reversion product, you choose one that meets your needs.
Remember that taking a home reversion 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 pick the plan that is right for you.
Use our free home reverison calculator to see how much you can release now.
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