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Equity Release Mortgages

Guide to equity release

Due to the rise in house prices over recent decades many of us have a house worth a lot of money but limited savings. A lifetime mortgage allows a home owner to enjoy the capital value of the house during their lifetime.

Equity release allows you to release cash from your property without the upheaval or expense of moving home. To be eligible for one of these plans, you need to be a UK homeowner aged 55-95. The money you release can be spent in any way you like and, what’s more, there are typically no monthly repayments to make. And there’s no need to worry about the longer term: you can stay in your home for life, or until you decide you want (or need) to move.

What types of equity release plans are available?

There are many equity release plans on the market, so it’s vitally important to seek independent, expert advice from a company that will compare the whole market to find the right deal for your circumstances.

There are two main types of equity release plan:

With a lifetime mortgage, you take out a loan, secured on your property, and receive that amount as a tax-free lump sum. You do not usually make monthly repayments. Instead, the interest “rolls up”, and the loan plus interest is repaid after your death, when the property is sold.

In some cases, and if you’re able to, the option exists to pay off some (or all) of the interest and some of the capital. The benefit of this approach is that you’ll lessen the amount owing, and limit (or avoid entirely) the “roll up” effect. In some instances, it will be family members, such as the children, who may help pay off any interest / capital as they are the ones likely to benefit.

With a home reversion plan, you sell all or part of your home in return for a tax-free lump sum and a guaranteed lifetime lease, with no monthly repayments to meet. After your death the house is sold, so the lender gets back its percentage share.

Save money with a drawdown plan

If you are considering releasing the cash out of your home, you might want to consider taking out a plan with a drawdown facility. This flexible type of equity release plan allows you to “draw down” the funds over a period of time, as and when you need it.

This approach can reduce the amount of money owed when the plan comes to an end, as you only start to accrue interest on the money as and when you actually withdraw it.

What can I use Equity Release for?

Absolutely anything. Some of the common uses are:

  • To repay an existing mortgage
  • To improve quality of life
  • To pay for alterations / improvements to your home to enable you to live there longer.
  • To help out family members, for example to buy their first home or pay for school fees.
  • To repay debts and reduce monthly outgoings
  • Simply treat yourself to do the things you have always wanted to do.

Will I still own my own home?

With a Lifetime Mortgage, you will continue to own your own home and it will be your responsibility to maintain your property keeping it in a state of good repair, take out specified insurance and pay all property related bills. However, be aware that with a Home Reversion Plan, you would sell all or part of your home to the lender/provider. We don’t advise on Home Reversion Plans.

What else should I know?

Thousands of homeowners have already unlocked the cash tied up in their homes to give themselves a much-needed cash boost. However, it’s important to remember that taking our any kind of equity release plan will reduce the value of your estate. It might also affect your entitlement to state benefits.

Is there anything else to consider?

Many equity release providers are members of the Equity Release Council, which has a Code of Conduct to help ensure your financial safety. If you’re considering taking out an equity release plan it’s worth seeking out plans approved by the ERC.

We are proud to be a member of the Equity Release Council ensuring we can offer you the best possible service and advice.


Need more information?

If you would like to to talk to us about how Equity Release can help you and what our options are, please contact using our contact from.

We will guide you through your options, to consider what is best for you.

Equity release includes Lifetime Mortgages and Home Reversion Schemes. We can advise and arrange Lifetime Mortgages and will refer to an approved specialist for Home Reversion schemes

Broker fee Disclosure

There may be a fee for mortgage advice. The precise amount will depend on your circumstances and will be agreed with you before proceeding but we estimate this to be £1295