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FAQs

What is a key equity release? ›

Equity release allows you to unlock some of the tax-free funds from the value of your home. It's one way you can take control of your later life finances.

Equity release is a way to unlock the value of your home. If you're aged 55 or over you can take out cash, tax-free. You can do so without having paid off your existing mortgage, however this must be repaid from the money you release, and you don't have to move out of your home.

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You'll normally get between 20% and 60% of the market value of your home (or of the part you sell). When considering a home reversion plan, you should check: Whether or not you can release equity in several payments or in one lump sum. The minimum age at which you can take out a home reversion plan.

Equity release plans provide you with a cash lump sum or regular income. The "catch" is that the money released will need to be repaid when you pass away or move into long term care. With a Lifetime Mortgage, you will owe the capital borrowed and the loan interest accrued.

Equity release is potentially worth considering if you are 55 or over, would like a more comfortable retirement and own your own home. But every person's circ*mstances are different and you might want to take a close look at your financial situation first, before deciding if equity release will meet your needs.

A lifetime mortgage is the most commonly used form of equity release. It is a way to borrow money against the value of your home, with a loan that will be repaid only when the property is sold. In other words, it's a way to turn some of the stored value in your home into money that you can spend now.

Disadvantages. Equity release reduces the value of your estate and the amount that will go to the people named as beneficiaries in your will. Your estate is everything you own, including money, property, possessions and investments. With a home reversion plan, the reversion company owns all or a part-share of your home ...

You'll need professional advice BEFORE you equity release

Before applying for a lifetime mortgage or home reversion plan, you'll first need to seek advice from a qualified equity release adviser. This is a requirement of the Financial Conduct Authority.

The two most popular types of equity release are lifetime mortgages and home reversion.

Does it cost money to release equity? ›

Equity release offers a lump sum of tax-free cash secured against your home, similar to a regular mortgage. You will be charged interest on the amount you release at a specific rate. Unlike regular mortgages, you do not need to make any payments towards the plan until you pass away or move into long-term care.

Borrowing. You could look at forms of borrowing as an alternative to equity release. Even if you're retired you can take out a personal loan against your residence, provided you have enough income to make future repayments.

What is equity release? If you live in mortgaged property, the equity in it is the difference between the value of your home and the total of the mortgage and any loans that you have secured on it. Equity release is an agreement that lets you access money from this equity without having to leave your home.

Equity release plans are available to homeowners from age 55, and there is no upper age limit. Not all providers lend at all ages, but most plans are available to applicants aged 60 to 85. For joint applications, providers will consider both ages; You may make a sole application if one applicant is too young.

Some of the top companies offering the best equity release alternatives include Aviva, Legal & General, and Nationwide, known for their competitive rates, flexible terms, strong customer support, and catering to diverse homeowner needs.

The longer you live after releasing equity, the higher the total amount owed will be. But, if your provider is a member of the Equity Release Council and meets on their standards, your plan will be fully protected by a 'no-negative equity' guarantee. So, you'll never owe more than what your home is worth.

The best type of equity release will depend on your own needs and circ*mstances. A lump-sum lifetime mortgage might be a good way to clear an existing mortgage, for example, while the drawdown version could help top up your income without running up hefty interest costs.