What Is Equity Release?

If you're over 55 years old, you will have a range of different choices available to suit your borrowing needs. You can access the equity in your home as tax-free cash without having to sell or downsize. There’s no restrictions on how you spend your money, offering the financial freedom to make the most of your later-life.

Do I have to make monthly repayments?

With the most popular type of equity release plan, a lifetime mortgage, you don’t have to make any regular monthly repayments. Instead, interest is rolled-up against the loan so that you have nothing to pay during your lifetime. Then when you pass away, or move into long-term care, the house is sold and the loan, including the interest, is paid off with any remaining money passing to your estate.

Will I retain ownership of my home?

A lifetime mortgage plan allows full home ownership. These plans are the most popular with over 55s considering taking out equity release.

However, homeowners who choose to take out a home reversion plan, sell a percentage or all of their home in exchange for a lump sum of cash, along with the right to stay in the property, rent free for as long as they live.

Lifetime Mortgages

A Lifetime Mortgage is a mortgage secured against your home, allowing you to release a tax-free cash lump sum from the equity held in your property. With a Lifetime Mortgage you retain full ownership of your home and still benefit from any increases in price.

Home Reversion Plans

A Home Reversion Plan is another type of equity release product which offers a way to sell part of your home in return for a tax-free lump sum or regular income with a ‘lifetime lease’. A ‘lifetime lease’ ensures the individual can stay in their property until they die or go into long-term care.

Equity release may involve a lifetime mortgage which is secured against your property or a home reversion plan which requires the sale of property for a discounted price. To understand the features and risks, ask for a personalised illustration. You only continue to own your own home with a lifetime mortgage.

Equity release may impact the size of your estate and it could affect your entitlement to current and future means-tested benefits.

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