Equity Release

Equity Release is a way of accessing the capital you have built up in your home. It won’t be suitable for everyone, but can provide a useful solution for those looking for a cash injection in later life.

There are many good reasons why you might want to access the capital you have invested in your home. These might include:

  • Settling an interest-only mortgage
  • Enhancing your standard of living in retirement
  • Helping family members
  • Special purchases or travel
  • Unexpected costs such as alterations to your home for special needs

You cannot normally release the equity in your home until you have reached the minimum retirement age – and the later you leave it the better, in terms of the rates on offer.

There are two main types of Equity Release:

  • Lifetime Mortgages are designed to run for the rest of your life or until the property is sold. Interest can be paid monthly or can be rolled up into the loan amount for repayment when the outstanding debt is settled. Your property will be assessed and you will agree an amount to be released with the Equity Release provider. Depending on the lender and the terms of the loan agreement, that amount can either be taken immediately as a lump sum or in stages as needed.
  • Home Reversion Plans operate a little differently. Under a Home Reversion Plan, you sell a proportion or all of your property to a provider who will then permit you to live in the property until your death or the property is sold. With this type of plan, the decision to sell is irrevocable and only the proportion of the value of your home that you retained under the agreement will be returned to your estate on your death or when the property is sold.

Our Later Life Academy accredited advisers have had specialist training in dealing with elderly and vulnerable clients. Where legally required or on the client’s request, we will involve family members or other trusted third parties in equity release proceedings and we will ensure that everyone understands the implications of the arrangements under consideration.

This is a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration. Equity release, home reversion plans and lifetime mortgage are complex products and you should request personalised information. Equity release could affect your income tax position and your entitlement to state benefits; it could also restrict future options for moving house or paying for long term care. If using an equity release plan to consolidate debt, you are taking a previously unsecured debt and securing it against your home. Equity release could reduce the value of your estate that your beneficiaries expect to inherit. You should talk to them before committing to a plan. Using equity release to raise investment capital is inadvisable under most circumstances and you should talk to an investment adviser if this is your intention. We can arrange this for you.
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