THINGS YOU SHOULD KNOW
ABOUT EQUITY RELEASE
The most popular form of equity release, the lifetime mortgage, has come on leaps and bounds in recent years, with plans now offering a range of important safeguards.
Along with strict regulations from the Financial Conduct Authority, the majority of the plans we offer are backed by the Equity Release Council and offer customers a great range of benefits.
You can make monthly repayments - or not, it's your choice
Regular repayments during the term of the loan are an option rather than a requirement, so there are no formal affordability checks for most plans*.
You will never pay back more than your home is worth
The no-negative-equity guarantee, which comes with all the plans we offer, means that your estate will never have to pay back more than your home is worth when it’s sold.
Protect a share of your home’s value to leave to family
You can choose to protect a percentage of your home’s value in order to guarantee an inheritance for your loved ones.
You will still own your own home**
The most popular type of equity release plan is called a lifetime mortgage, and works much like a conventional mortgage. The amount borrowed, plus the interest, is rolled up and is repayable when the last homeowner dies or moves into long-term care.
Lifetime mortgage interest rates can be fixed – for life
This would mean that even if rates were to increase over the years, you would continue to benefit from the rate you fixed when you take out your plan. It also means you know exactly how much your equity release is going to cost.
You can move home
Lifetime mortgages are portable, meaning that you can move house and take the loan with you subject to your new home meeting the lender’s criteria.
You could switch plans in the future
If new plans or interest rates were to become available in the future, you may choose to switch your plan onto a new deal.***
* If you don’t make repayments the interest will roll up over time. This will increase the size of the debt and reduce the amount that will be left to your beneficiaries when you’re gone.
**You only continue to own your own home with a lifetime mortgage. Equity release may involve a home reversion or a lifetime mortgage, which is secured against your property. To understand the features and risks, ask for a personalised illustration.
***Exit penalties may apply and the availability of other plans will depend on the lenders’ criteria at that time, and the amount outstanding on your equity release plan including any interest that has accrued.