Available types of
Equity Release Plans
Equity release can seem complex, but at Equity Release Works – we keep it simple. Our advisers will guide you through each of the Equity Release Plans available, to help you find the plan that is most suitable for your circumstances.
Lifetime mortgages enable you to release a lump sum of cash using the value of the property. There is no requirement to make regular monthly repayments with this type of plan. The amount you release, plus the interest accrued will be repaid using the money made when the property is eventually sold. This does not happen until you die, move into long term care or permanently leave the property.
Drawdown Lifetime Mortgage
Similar to a standard lifetime mortgage, but with the drawdown lifetime mortgage – you can access your money with increased flexibility. As opposed to just receiving a single lump sum, you are given the option to release your cash over a period of time, as and when you need it most. You only pay interest on the cash you take and because of this, these equity release plans often prove to be more cost-effective than others.
Interest-Only Lifetime Mortgage
Interest-Only Lifetime Mortgages are similar to a standard lifetime mortgage. With an Interest-Only Lifetime Mortgage, you are able to decide whether to make repayments in full or regularly, to reduce the impact on the value of your estate. Certain plans allow you to make repayments that are equal, or less than, the amount of interest charged. The balance, along with the interest accrued over time is paid off using the value of your estate – once you have died or moved into long-term care.
Retirement Interest-Only Mortgages (RIO)
Retirement Interest-Only Mortgages are an alternative product to Lifetime Mortgages to provide funds for people in retirement. With a Retirement Interest-Only Mortgage, you are only required to maintain the interest payments on your loan, the balance of the mortgage will remain the same until you sell your property. RIO Mortgages work similar to regular Interest-Only Mortgages, as you are only required to repay the interest part of the loan monthly. When you come to sell the property, are put into long-term care or upon your death, the loan amount will then be paid to the provider.
Home Reversion Plans
A home reversion plan works in an entirely different way to a lifetime mortgage. It involves you selling all or part of your property to the reversion company in exchange for a cash lump sum. Home reversion plans are not popular & account for less than 1% of the UK market, we do not offer this type of plan.
There are other alternatives available to Equity Release if you are trying to free up cash in retirement. Borrowing money from a family member or close friend or downsizing your current property may be more suitable than releasing equity from your home.