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What to consider before releasing equity from your home.

  • Equity release is a way of unlocking some of the value of your home and turning it into a tax-free, cash lump-sum.
     

  • It’s essentially a long-term loan that’s repaid using your home once you pass away or enter long-term care. Until then, you’ll remain a homeowner with no need to move out.
     

  • When you take out equity release, a lifetime mortgage will be secured against your home.

  • Whatever financial freedom means for you in later life – moving house, renovating your home, paying off an interest-only mortgage or helping your children – equity release is designed to help make it happen. 
     

  • Entering into a lifetime mortgage (or any form of equity release) will reduce the amount of inheritance you can leave behind. It may also affect your tax position and eligibility for welfare benefits. 

What is equity release?

Equity release is a big financial commitment, so understanding what it would mean for you and your family is really important. Here’s an overview of the key considerations.

What are the benefits of Equity Release?

5 key reasons why equity release is becoming so popular:

The money you release is tax free

You can still own your home

You can choose whether you wish to make monthly repayments

You can use the money however you wish

You can take the money in one lump sum or smaller installments

Make that trip of a lifetime.

Home improvements, a new kitchen or conservatory.

Move to a new home.

Buy a new car or motorhome.

Fund a business investment.

Look after your health and pay private medical bills.

Adapt your home, to make life a little easier.

Help your children with house deposits and weddings

Manage your estate, wealth and tax planning.

Leave a living inheritance.

Fund leisure interests or visit relatives abroad.

Pay off an outstanding mortgage

Maintain your independence and pay for ongoing care at home.

Why choose Equity Release?

You can use the money however you wish.

Here are just some of the reasons you might consider equity release:

Lifetime Mortgage
  • Like any mortgage, a lifetime mortgage is a loan secured against your home.

  • The loan is a reserve facility which can be used as and when.

  • A lifetime mortgage will be secured against your home.

  • Interest is charged on the loan, which you either pay, or allow to roll up.

  • You only accumulate interest on the amounts you draw down, from the time you take them.

  • When you die or move out, your home is sold and the money is used to pay off the loan and any interest that has been added.

  • Anything that’s left over goes to your beneficiaries.

Home reversion scheme
  • A home reversion scheme lets you use the money that’s tied up in your home.
     

  • You could use this to pay for care in your home.
     

  • With a home reversion scheme, you receive a tax-free lump sum, staying in your home as a tenant.
     

  • When you die or move out, your home is sold and the money is used to pay off the loan and any interest that has been added.

What types of Equity Release are there?

Equity release comes in two main forms – lifetime mortgages and home reversion plans. 

With a lifetime mortgage, unlike other forms of equity release, you can release tax-free cash from your home whilst retaining full ownership of your home, and without having to commit to making monthly repayments.

Home Reversion is when you sell a percentage of your home for a lump sum of money.

Am I eligible for equity release, and does my home qualify?

Equity release isn’t right for everybody and every home, so it depends on you and your circumstances.

You’re a homeowner aged 55 or over. 

If you’re married, in a civil partnership, or cohabiting, you’ll both need to be 55 or over

 

You live permanently in your home. 

The property must be your main residence and not unoccupied for more than 6 months at any one time

 
Your property is in the UK (not including the Channel Islands or Isle of Man) and worth at least £75,000.

For flats and maisonettes, we only use 85% of the valuation to work out how much you can borrow. We have lending criteria that help us to decide what properties we will accept

Can I repay my lifetime mortgage early?

  • A lifetime mortgage isn’t designed to be repaid in full before you (and your partner, if you have a joint mortgage) pass away, or move permanently into long-term care.
     

  • If you want, you can make voluntary partial repayments with no early charges to repay (terms and conditions apply and vary from lender to lender).

A kindly reminder

  • Remember, interest builds up throughout the lifetime of the loan and is added to both the loan and the interest previously added. This quickly increases the amount you owe.

  • Your loan and interest are usually repaid from the sale of your house when you pass away or go into long term care, subject to the lender's terms and conditions.

  • Equity release will reduce the amount of inheritance you can leave and may affect your tax position and eligibility for welfare benefits.

  • Because of this, a lifetime mortgage isn't suitable for everybody, and it depends on your personal circumstances. Find out more about our lifetime mortgage to see if its right for you. 

How much equity can I release?

Fill in the short form, and we'll be in touch to let you know how much tax​-free cash you could release from your home.