Equity release is a way for homeowners aged 55 or over to release the equity tied up in their homes, whilst continuing to live there.
Book a free assessment with our equity release adviser to find out if it’s right for you.
What is equity release?
Equity release is a way for you to unlock tax-free cash (equity) from your home. You can continue to live there and no repayments are required for the rest of your life (or until you go into long-term care).
To qualify you must:
- Be a UK homeowner
- Be over 55 years old (both if in a couple)
- Own a property worth at least £70,000
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. Our friendly advisers can help you to explore equity release – and the alternatives – with no jargon, pressure or bias.
How much can I release?
The amount you can release will depend on your age and property value – typically ranging from 20% of your property value for a 55-year-old to 50% for a 90-year-old. Some plans will offer more depending on your health and lifestyle choices.
Find out instantly how much you could release with our equity release calculator.
Equity release – the facts
- There are two types of equity release – a lifetime mortgage and a home reversion plan. A lifetime mortgage is by far the most popular type of equity release.
- You still own your own home – with a lifetime mortgage you are still the legal owner of your property and have the right to live in it for as long as you choose.
- The cash you release is tax-free – you have to take advice before releasing cash.
- You can spend the money you release as you like – popular uses include helping loved ones financially, home improvements and paying debts.
- Plans vary – in the same way ordinary mortgages vary from lender to lender, so do lifetime mortgages.
- There are typically no monthly repayments – a lifetime mortgage is a loan secured against your property and repaid when your plan comes to an end. Usually, that’s when you, or the last remaining applicant, either passes away or enters long-term care. You should always think carefully before securing a loan against your home.
- Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
Product features for a modern world
Equity release has changed a lot in recent years, all with homeowners like you in mind. You can now enjoy peace of mind and control over your lifetime mortgage. Many plans now come with modern lending feature which enable you to:
- Make payments – a variety of plans allow regular or ad hoc payments to suit you. This will reduce the amount of interest you will pay over time.
- Choose fixed early repayment charges – most plans now come with fixed early raiment charges so you will also know how much it would cost to repay your plan early.
- Guarantee an inheritance – you can protect a percentage of your home’s future value as long as you don’t take the maximum loan offered. The percentage of loan not taken is the same percentage of your home’s future value which will be protected to pass on to your beneficiaries.
Plus you get all of these protections as standard, as all of the plans we recommend meet the Equity Release Council standards and come with:
Your adviser will be able to explain how:
- A lifetime mortgage is a loan secured against your home. It will reduce the value of your estate and may affect your entitlement to means-tested benefits
- Equity release may not be the right financial decision for you. If it’s not we’ll tell you straight away and help you to explore the alternatives.