What is Equity Release?
Equity release is a way of accessing a proportion of tax-free money, tied-up in the value of your home, without having to move.
You might be eligible to release equity from your home, if you own your home outright, or have an outstanding mortgage, through a lifetime mortgage or a home reversion plan.
With a lifetime mortgage, the most common type of equity release, you can take a lump sum or set up a drawdown facility to access the money as needed. The initial amount borrowed, plus any interest that builds up, is repaid when the last remaining homeowner passes away or moves into long-term care.
With a home reversion plan you sell part of all of your home to a provider for less than market value, but can continue to live in your home typically rent free.
What Can I Use Equity Release For?
People release equity from their homes for many reasons. And with house prices having risen significantly over the past decade (Nationwide Property Price Index), for some people this will now be their biggest asset, more so than savings and income.
Features of Equity Release
No Monthly Repayments
With a lifetime mortgage, there are no monthly repayments required, which means there are no formal affordability checks for most plans. However, interest will roll up over time, increasing the amount you owe.
Voluntary Repayments
There are plans that may allow you to make voluntary payments subject to certain limits, which allows you to manage the amount you will have to repay at the end of the plan. Early repayment charges may apply above a set value.
Inheritance Protection
You can choose to protect a percentage of your home’s value to guarantee an inheritance
for your loved ones. Although this will reduce the amount you are able to release
Enhanced Plans
Depending on you or your partner’s medical circumstances, you may be able to release
more, if you need it, or obtain a better rate of interest to suit your individual needs.
No Negative Equity Guarantee
This comes with all the lifetime mortgages we offer and means that your estate will never
have to pay back more than your home is worth when it’s sold.
Portability
The lifetime mortgages we recommend are portable, meaning that you can move house and take the loan with you subject to your new home meeting the lender’s criteria.
HOW MUCH COULD YOU RELEASE?
Use our online calculator to get an estimate of how much equity you might be able to release.
It’s quick, easy, and gives you an idea of what’s possible – no obligation, just a helpful starting point for your decision.
Benefits of Equity Release
- Stay in the home you love – with a lifetime mortgage you keep 100 % ownership and the legal right to live there for life.
- Tax‑free cash you can use for almost anything you want or need.
- Take a lump sum or smaller withdrawals – most plans let you draw money in stages (often called a “drawdown facility”).
- No required repayment – therefore there are no affordability checks.
- Fixed interest for life – the rate is locked in when you take out the loan.
- Ability to change plans if interest rates fall. Being able to change your plan will depend upon whether you qualify for the latest plans, the amount outstanding on your equity release plan including interest that has accrued and any potential early repayment charges that may be applicable.
Equity release comes with a range of benefits that may suit you and your financial needs in later life.
Things you need to consider
- Advice is required to proceed with equity release and there may be other options which better suit your circumstances.
- Any money released, plus accrued interest would be repaid upon death, or moving into long-term care.
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Equity release requires paying off any existing mortgage.
- Equity Release may have an impact on your entitlement to means tested benefits now or in the future.
- Once you’ve taken out an equity release plan, no other borrowing can be taken out using your home as security.
- Equity release may involve a home reversion plan or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care.
There are important considerations and drawbacks to be aware of before going ahead with equity release.
Only if your case completes would our advice fee of £1,695 be payable. Other lender and solicitor fees may apply.
REQUEST A FREE GUIDE
Read more about Equity Release whenever you have a quiet moment.
We’ve put together a free guide packed with information and answers to the most frequent questions about equity release.
You can download an online version right away or we can post a copy to your home.
READ ON
We have all the information you need to help you understand if Equity Release might be the right option for you. Choose from one of the topics below, or use the main menu to find out more.
How Do I Apply?
Find out more about the application process, the conversations you will have with you adviser and the step-by-step process.
How much does it cost?
Learn about the costs involved in releasing equity from your home, as well as considering the impact on your future finances.
Frequently Asked Questions
We’ve compiled some of the most frequently asked questions, to help you understand if equity release is right for you.