Equity Release Mortgages

If you’re 55 or older, you may be considering ways to release some of the value of your home without having to move. Equity release could help you use some of the value you’ve built up in your home to kickstart your plans in later life. You can choose to release money as a lump sum or in smaller amounts to meet your needs and you'll continue to own your home.

What is equity release?

Equity release is a way of unlocking some of the value in your home as tax-free cash. This is done by taking out a lifetime mortgage. You can choose to take your cash either as a lump sum or as smaller amounts over a period of time.

There are many reasons why homeowners choose to release equity. It can help with retirement planning, or to pay off an existing mortgage. You might be planning to make some home improvements, or maybe you want to raise some cash to give as a gift to family or friends.

The amount of equity you can release usually depends on:

  • The value of your home
  • The age of the people named on the mortgage.

How does equity release work?

You can release equity with a lifetime mortgage, which is a type of loan secured against your property. You can take a tax-free lump sum for the entire amount of the loan, or opt for smaller payments over a longer period of time.

The amount you can release will be dependant on your age and property value.

You won’t have to move out of your home, and there are no monthly repayments to make. The loan (plus interest) is usually repaid through the sale of the property when the last surviving person named on the mortgage dies or moves into long-term care.

Perhaps you’re planning ahead for retirement and looking to increase your home’s value with some home improvements. Releasing a lump sum can help you pay for this.

The money can be used for any purpose, such as travel, or to help your grandchildren with their own financial futures – as a mortgage deposit, or to support their education.

Read more about equity release

We have more detailed information here:

What is a lifetime mortgage?

How does a equity release work?

Is equity release a good idea?

Am I eligible for equity release?

How can Lloyds Bank help?

If you want to talk through if equity release might be right for you, we can refer you to our partners Scottish Widows Bank, a division of Lloyds Bank plc. They offer a Lifetime Mortgage that could help you unlock some of the value from your home.

Scottish Widows is proud to be a member of the Equity Release Council and abides by its standards. The Equity Release Council was established 30 years ago and is the industry body for the UK equity release.

After discussing your options with a Scottish Widows Bank Later Life Lending Adviser, you'll know if equity release could be the right choice for you.

Equity release - things to consider

As well as the advantages of a lifetime mortgage, there are other things you should be aware of when deciding whether this type of equity release is for you. Speak with an adviser to assess your situation and whether releasing equity in your home could help you meet your needs.

Advantages of a lifetime mortgage

  • Having a lifetime mortgage gives you flexibility over your finances. You can take a single tax-free lump sum or take a series of smaller sums over time.
  • Because the mortgage is repaid from the sale of your home, you don’t have to start repaying on it. You can continue to live in your home for as long as you want or need to.
  • Whatever portion of your home you choose to release as cash, you can keep the rest locked into your home and pass it on to your family when you die. However, the inheritance you leave could be reduced when it's time to sell the property.

Disadvantages of a lifetime mortgage

  • If you choose not to make repayments the interest is added on over time as compound interest, which can quickly increase the overall amount you owe.
  • Releasing equity from your home also reduces how much you are able to leave as an inheritance.
  • If you rely on means-tested state benefits to supplement your income, the increase in your income that comes from equity release may mean you no longer qualify for it.

Scottish Widows Bank Lifetime Mortgage has a no negative equity guarantee. This means that, whatever happens you'll never have to repay more than the value of your home when it is sold. 

Are you eligible for a Scottish Widows Bank Lifetime Mortgage?

You may be if:

  • all applicants are aged between 55-85
  • you are applying for a single or joint application 
  • the lifetime mortgage is for your main residence
  • the property is in England, Scotland or Wales
  • you already own the property.

What next?

Find out if you can apply for a Scottish Widows Bank Lifetime Mortgage by using our Lifetime Mortgage Checker.

Lifetime Mortgage Checker

Or, you can call us on 0345 122 1443. Our lines are open Monday to Friday 8am – 8pm, Saturday 9am – 4pm. We’re closed on Sundays and Bank Holidays.

If you qualify, we will arrange for you to talk to an expert Scottish Widows Bank Later Life Lending Adviser at a time that suits you.

Equity release explained : FAQs

  • Take a look at sale prices for similar homes in your area to get an idea of how much equity you have in your home. The Scottish Widows Bank also offers a free independent property valuation.

  • There are fees involved with equity release, similar to when you arrange a conventional mortgage. You may need a valuation on your home before you’re accepted. If so, however, with a Scottish Widows Bank Lifetime Mortgage you'll get a free independent property valuation, along with free conveyancing and you’ll also get £600 paid towards the cost of independent legal advice. Lifetime mortgage rates are fixed at the rate you arrange, which means the interest rate won’t change over time.

  • A lifetime mortgage application tends to take around eight weeks to complete, from initial application to the first release of funds. Some applications can take more or less time depending on the individual circumstances of your application

     

  • Yes, it’s possible to sell your house if you have released equity from it. If you wish to move to a house of the same or higher value, your provider may be able to switch the current lifetime mortgage to the new property, subject to meeting lending criteria at the time. This is called porting. If you’re moving to a home of lower value, you may be required to repay the lifetime mortgage.