Equity Release

Older couple at home

What is Equity Release?

If you’re in need of flexible finances for a successful retirement, your home could help. Equity release plans allow older homeowners to release money tied up in their home as tax-free cash, while continuing to live in their home.

Your partner can also live there after you pass away, if you have a joint plan. You can take out the money as a lump sum, in several smaller amounts, or both.

We offer a free service to help you arrange your Equity Release – speak to one of our team today to find out more.

Uses for Equity Release

There are many uses for Equity Release, which include:

Clearing existing debt
Going on holidays
Making home improvements
Buying a car
Paying off an existing mortgage

The amount of money you can release from your home depends on your age and property value, but it is usually up to 60%. The two main types of Equity Release are the lifetime mortgage and home reversion scheme – see below.

Lifetime mortgage

This is a loan secured against the value of your home, typically at a fixed interest rate.

Facts: Model house and calculator

  • It usually doesn’t have to be paid back until you die or if you move into care. Your property is sold, you repay the loan and the surplus goes to your estate
  • Typically you don’t have to make repayments until the plan ends
  • You remain the owner of your home
  • You can normally borrow up to 60% of the value of your property
  • You can move into a new property, as long as it is acceptable as continuing security for your loan (Equity Release Council standard)
  • A percentage of your property can be ring-fenced for later use, possibly as an inheritance for your family

Home reversion scheme

You sell part or all of your home to a private company, in exchange for a cash lump sum or regular payments.

Facts:

  • You can live in your home rent-free, usually until you die or if you move into long-term care, but have to keep it maintained and insured
  • You normally receive 20-60% of your home’s market value or the part you sell
  • At the end of the plan, your property is sold and the proceeds are shared according to the proportions of ownership
  • You can ring-fence a percentage for your family’s inheritance or other later use

Which is the right plan for me?

The most suitable plan for you will depend on such things as:

  • How much cash you need
  • Your property’s value
  • How you want the money - straight away or in several payments
  • The age of you and your partner
  • If you wish to ring-fence a percentage as an inheritance for your family
  • Your health and lifestyle

Do I qualify?

To qualify for Equity Release, you must:

  1. Be aged 55 or over for lifetime mortgage and over 60 for home reversion – if you are applying as a couple, both applicants must be over this age
  2. Own and live in the property
  3. Be able to release enough equity from your property to pay off any outstanding mortgages or secured loans. You can use the money left for your other financial needs.

Your property must also be:

  1. Valued at £70,000 or more
  2. Situated in the UK
  3. Freehold or leasehold with a minimum lease period of 75 years remaining
  4. In good condition and of standard construction

How we can help

We can assist you in arranging your Equity Release plan with a free, no-obligation consultation. Working with the widest choice of lenders, we study your circumstances and select the right organisation. This means you get the best value and the best service for you. Our friendly advisers will help you understand equity release and let you fully enjoy your retirement with a plan.

If you want to know more about Equity Release, click below to visit our Equity Release FAQs page.

Ready to know more?

Get in touch and speak to one of our friendly advisers today.