Equity Release

If you’re a 55 or older, you may consider releasing some cash from the value of your home

You could lose your home if you don’t keep up your mortgage repayments

What is equity release?

Equity release is a way of releasing some of your home value. This can be done by taking out a loan secured on your property, either by way of a lump sum or regular payments.

Equity Release – Lifetime Mortgage

  • Release some of your home value – benefit while still being the owner of your home
  • The cash released is tax-free

What do I need to know?

  • Like a standard residential mortgage, you will borrow against the value of your home, and you’ll still be the homeowner.
  • Any cash released is tax-free, so you can use the money as you please. You may want to use it for home improvements, holidays or to pay off an existing mortgage or loan.
  • Depending on your lender, you can pay the loan’s interest as you go or rolled up with nothing to pay until the end. The loan plus any outstanding interest (if you decide not make payments towards the loan) are then repaid when you (or last remaining applicant) either passes away or moves into long term residential care - this could mean there is less value available in the home for you to leave as inheritance

Equity Release – Home Reversion Plan

  • Sell a share of your property – you’ll receive this as a lump sum or regular income
  • Gives you the opportunity to live in your home rent free although you will still need to pay to maintain it, as you have already been doing

What do I need to know?

  • As the homeowner, you will know exactly what share of your home you’ve parted with and what share you’re left with
  • The cash released is tax free
  • You’ll still live in your home, usually rent free
  • When your property is sold, the sale proceedings are shared according to the remaining split of ownership

What next?

Before deciding on whether this type of mortgage is right for you, you should speak to an adviser who is fully qualified in equity release. An adviser can explain what is involved and any other options available before you proceed. 

We currently do not offer advice on equity release, but you can find a qualified adviser at Mortgage Advice Service or through the Equity Release Council.

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