Equity release could help you boost your finances so you can live the life you deserve and achieve your retirement dreams.
Maybe you’re planning a once-in-a-lifetime holiday or making some
much needed home improvements. Read on to find out more about equity release.
Did you know that with a lifetime mortgage, the most popular type of equity release plan, you continue to own 100% of the home you love.
The money you release is also completely tax-free, and you can choose how you want to access this, whether that’s as a lump sum or over regular smaller instalments.
Plus, some equity release plans don’t require any regular repayments meaning once you’ve repaid any existing mortgage, which is a condition of equity release, you could reduce your monthly expenses.
Calculate how much tax-free cash you could access
How does equity release work?
When you pass away or move into long-term care, your house is sold. The loan, plus accrued interest, is paid off with the remaining money passing to your estate.
As the interest accumulates it can equate to a substantial portion of the property’s value when it is sold as interest rolls up along with the capital, meaning equity is reduced.
However, some plans now allow the interest or part of the loan to be repaid earlier to lower costs.
How do I know if I qualify?
If you’re a homeowner aged 55 or over, and your home is worth over £70,000, you might be eligible for equity release.
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Every lender has different qualifying criteria depending on your individual circumstances, which is why it’s important to speak to an equity release specialist to find out if you qualify, and how much you could release.
How much you can release will depend on various factors such as your age and the value of your home, along with your health and lifestyle.
Some lenders offer medically enhanced plans if you have some health conditions, meaning you may be eligible for certain plans and rates.
The importance of advice
It’s important that you take advice when considering equity release, and a specialist broker can discuss all the options available to you, including what impact it could have on the size of your estate over time, as equity release will decrease this, and if your entitlement to current and future means‑tested benefits may be affected now or in the future.
Equity release may involve a home reversion plan or lifetime mortgage which is secured against your property and may reduce the value of your estate and impact funding long-term care.
To understand the features and risks ask for a personalised illustration.
Safeguarding your loved ones
If you’re considering equity release, it’s important to discuss this with your family as it will impact the amount of inheritance you can leave.
With some equity release plans, you can ring-fence a portion of your property’s future value, to guarantee inheritance to your family.
Furthermore, a no negative equity guarantee means the amount of money you borrow against the value of your home, plus any rolled-up interest, can never go above the value of the property, and the remainder of the loan would be written off.
Your estate will never owe more than your property is worth when it is sold.
Calculate how much tax-free cash you could access
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