What is equity release?

Equity release is a form of later life lending which enables you to access the equity (cash) tied up in your home if you are over the age of 55. It is an increasing popular way to access money without having to move.

Equity release plans

There are two main types of equity release plans – lifetime mortgages and home reversion plans:

Lifetime mortgage

You take out a mortgage secured on your property while retaining ownership. The loan amount and any accrued interest is usually paid back when you pass away or move into long term care. Most people who take out equity release use a lifetime mortgage. In the same way ordinary mortgages vary from lender to lender, so do lifetime mortgages.

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Home reversion

You sell part or all of your home to a home reversion provider in return for a lump sum or regular payments. You have the right to continue living in the property until you pass away, rent free, as long as you maintain and insure it. At the end of the plan your property is sold and the sale proceeds are shared according to the remaining percentages of ownership.

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What is equity release?

Simply put, equity release is a way for you to release tax-free funds from your home without having to move. It is a form of later life lending that doesn’t require you to make monthly repayments. You can take the money you release as a lump sum or, in several smaller amounts, or as a combination of both.

To be eligible for equity release there are a number of criteria you’ll need to meet before you can apply. To qualify you must:

  • Be a UK homeowner (and be living in it as your main residence)
  • Be over 55 years old (both if in a couple)
  • Own a property worth at least £70,000

You will also need to release a minimum of £10,000. The maximum you can borrow will be based on the age of the youngest homeowner, their health and lifestyle, and the property’s value. Essentially the older you or your partner are, the more money you could potentially borrow. You can find out instantly how much you could release.

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Equity release – the facts

Equity release plans have increased in popularity in recent years due to their increased flexibility, competitive interest rates and safeguards. Did you know that…

  • You can still release cash if you have an outstanding mortgage, but this must be paid off with the money released. Equity release is a popular option for homeowners with an interest-only mortgage which needs paying off.
  • Equity release is a big financial decision and you must take advice from a specialist adviser before taking out a plan.
  • Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits now or in the future.

To help you get a better understanding of equity release we’ve busted the common myths and misconceptions.

Go to myths and misconceptions

Getting started

Get a quick quote

Use our free equity release calculator to find out in less than a minute if you qualify and how much you could release.

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Speak to an adviser

Book a free Fact Find call to find out from an experienced Equity Release Adviser if equity release is right for you.
A fee of £1,695 is payable only if you choose to proceed and your case completes, and can be added to your loan.

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FAQs

It’s important that you fully understand equity release before taking out a plan.

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Is releasing equity the right option for you?

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

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

Equity release might seem like a good option if you want some extra money and don’t want to move house. However, there are some important ‘Things to think about‘. You need to look at how it will affect your future choices and financial situation in later life too.

Your friendly advisor can help you to explore equity release – and the alternatives – with no jargon, pressure or bias without it costing you a penny. Your advice fee is only payable on completion.

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