Equity release

Release some of the value in your home with The Equity Release Experts. We'll explain the benefits, drawbacks, and costs of equity release to help you make an informed decision.

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What is equity release?

If you don’t want to move home, equity release is a way to access some of the tax-free funds locked in your property.

The equity in your home is the amount left over after settling any existing mortgage and any other debts secured against it.

As long as you meet the provider's eligibility criteria, you could use the money you release from your property for a variety of reasons, from a holiday to helping a younger family member go to university.
 

How does equity release work?

Equity release is available to UK homeowners aged 55 or over and with a property worth at least £70,000. There are two types of equity release – lifetime mortgages and home reversions. Both come with different features, so it’s important to discuss with your adviser which one would be most suited to you and your situation.
 

Types of equity release

Lifetime mortgage

A lifetime mortgage is a loan secured against your home. Homeowners aged 55 or over could access some of the funds locked in the value of their home, while still retaining full ownership.

There’s usually a fixed rate of interest on these loans, though variable rates are available. Typically there are no monthly repayments to make as the loan, plus compound interest, is repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care.

Speak to The Equity Release Experts today for more information. They can recommend a plan to suit your circumstances. That could involve taking the money in one lump sum or in smaller amounts after an initial withdrawal, or making ad hoc capital repayments to reduce the overall cost of your plan. More on managing your total cost of borrowing.

 This is a lifetime commitment - check the benefits and drawbacks before you go ahead
 

Home reversion

A home reversion plan is the other type of equity release. However, you need to be at least 65 to apply. A home reversion plan involves you selling part or all of your property to a reversion company in return for a tax-free lump sum. You will receive less than the market value of your home and the amount you will receive will depend on your age, property value and the proportion you sell. You can live in your home rent-free for as long as you choose. But you will no longer be the legal owner.

There are no monthly repayments to make and no interest to pay. When your home is sold at the end of the plan, the provider will take their share of the proceeds. Your estate will receive the rest, providing you did not sell 100% of your property.

With a home reversion plan, you’ll receive your money in one lump sum.

Speak to one of our expert equity release advisers to find out which type of plan suits you best.
 

What can equity release be used for?

Equity release can help boost finances in later life as the tax-free funds you release can be spent in a variety of ways.

For some, it’s a matter of using the money to clear existing debts, though you should always think carefully before securing a loan against your home to repay existing debt. Others use it to help loved ones or to fund activities they’ve always wanted to do, such as go on the holiday of a lifetime. You could also use equity release for home improvements, such as a new kitchen.

Whatever you’re thinking of using the money for, it’s important to remember that any existing mortgage balance will need to be settled before the remaining funds come to you. The funds you release can be used to repay your existing mortgage, the remaining funds can be used for your needs and priorities.
 

How much does releasing equity cost?

When you set up your plan, there will be some charges. These may include surveyors' and solicitors' fees. Unless you decide to go ahead with a plan, our service is completely free of charge, as our fixed equity release advice fee of £1,799 is only payable on completion of a plan. Your adviser will explain these in more detail before you decide to proceed.
 

Can you pay off equity release early?

If you’re wondering “can you pay off equity release early?”, you can, however, with a lifetime mortgage, you’ll need to be mindful of early repayment charges. Your adviser will make you aware of any early repayment charges included in your plan.

To repay a home reversion you need to buy back the percentage of the property you originally sold to the provider, however, this will be at the full market price.
 

What are the advantages and disadvantages of equity release?

Equity release plans are not one size fits all. Your qualified equity release adviser will help you understand how you could release equity and whether it’s right for you and your circumstances.

Our independent equity release advisers can review your current situation to ensure you consider any potential alternatives. After researching the whole market, they’ll then give you a personalised recommendation. If equity release isn't right for you, they'll tell you.

How does equity release work?

Equity release is available to homeowners aged 55 and over and those whose property is worth at least £70,000.
 

Types of equity release

There are two types of equity release – lifetime mortgages and home reversions. Both come with different features, so it’s important to discuss with your adviser which one would be best suited to you and your situation.
 

Lifetime mortgage

A lifetime mortgage is a loan secured against your home. Homeowners aged 55 and over could access some of the funds locked in the value of their home, while still retaining full ownership.

There’s usually a fixed rate of interest on these loans, though variable rates are available. Typically there are no monthly repayments to make as the loan plus roll up interest is repaid when the plan comes to an end.

Speak to The Equity Release Experts today for more information. They can recommend a plan to suit your circumstances. That could involve taking the money in one lump sum or in smaller amounts after an initial withdrawal, protecting your inheritance, or making ad hoc capital repayments to reduce the overall cost of your plan.
 

Home reversion

A home reversion plan is the other type of equity release. However, you need to be at least 65 to apply. A home reversion involves you selling part or all of your property to a reversion company in return for a tax-free lump sum. You will receive less than the market value of your home and the amount you will receive will depend on your age, property value and the proportion you sell. You can live in your home rent-free for as long as you choose. But you will no longer be the legal owner.

There are no monthly repayments to make and no interest to pay. When your home is sold at the end of the plan, the provider will take their share of the proceeds. Your estate will receive the rest, providing you did not sell 100% of your property.

With a home reversion plan, you’ll receive your money in one lump sum.

Speak to one of our expert equity release advisers to find out which type of plan suits you best.

 

What can equity release be used for?

Equity release has become a popular way to help boost finances in later life as the tax-free funds you release can be spent in a variety of ways.

For some, it’s a simple matter of using the money to clear existing debts or help loved ones. Others use it to fund activities they’ve always wanted to do and now have the time for, such as go on the holiday of a lifetime. You could also use equity release for home improvements, such as a new kitchen.

Whatever you’re thinking of using the money for, it’s important to remember that any existing mortgage balance will need to be settled before the remaining funds come to you.

 

How much does releasing equity cost?

When you set up your plan, there may be some initial charges. These may include surveyors' fees. Your initial consultation with The Equity Release Experts is completely free of charge. If you decide to go ahead with equity release, you will be charged an advice fee and have solicitors' fees to pay. Your adviser will explain these in more detail before you decide to proceed.
 

Can you pay off equity release early?

If you’re wondering “can you pay off equity release early”, there is a chance that you can. However, with lifetime mortgages you’ll need to be mindful of early repayment charges. Our advisers and your solicitor will be able to advise if this is something that’s included in your contract. To repay a home reversion you need to repay the provider the full market price of the percentage of the property that you released equity on, rather than the discounted amount you received.  

 

What are the advantages and disadvantages?

Equity release plans are not one size fits all. Your qualified equity release adviser will help you to understand how you could release equity and whether it’s right for you and your circumstances.

Our independent equity release advisers can review your current situation to ensure you consider any potential alternatives. After researching the whole market, they’ll then give you a personalised recommendation. If equity release isn't right for you, they'll tell you.

Lifetime mortgage benefits

Your specialist equity release adviser will explain:

  • You can unlock cash from your home, tax-free, to help meet your needs in later life
  • You’ll always retain full ownership of your home and can stay in it for as long as you wish
  • You can choose to make reduced or no monthly repayments to suit your circumstances
  • You’ll never owe more than your home’s worth
  • You may be able to remortgage your plan in the future to release further funds or secure a better interest rate, although this isn’t guaranteed and may be subject to early repayment charges

Lifetime mortgage drawbacks

Your equity release adviser will also outline the following important things to think about:

  • A lifetime mortgage is a loan secured against your home and subject to compound interest, meaning the amount you owe can grow quickly
  • Equity release will reduce your financial options in the future
  • Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits
  • Equity release may leave you with limited or no property equity remaining
  • A lifetime mortgage is a long-term financial product and is not designed to be fully repaid until the death or entry into long-term care of the last remaining borrower, otherwise early repayment charges may apply

What are the advantages and disadvantages of home reversion?

Some of the benefits of these schemes include:

  • You can stay in your own home for the rest of your life, or until you move into permanent care
  • There’s no interest to pay because the scheme is not a loan
  • You’ll benefit from any increases in the value of your property on any unsold percentage
  • You can protect a portion of your property for inheritance, providing you do not sell 100% of your home.
  • Releasing equity from your home is tax-free
 

Drawbacks

  • You will receive less than the market value when selling your property to the home reversion provider
  • It is costly to cancel the plan early as you would need to buy back your property at the full market value
  • You won't be the legal owner of the property
  • A home reversion plan will reduce your financial options in the future.
  • Dependent on the percentage of your property you sell, you may be left with limited or no property equity remaining.
 

How does compound interest work?

Unless you choose to do so, there are no repayments to make on a lifetime mortgage until the plan comes to an end. As a result, you pay interest not only on the loan itself, but also on the interest already added to the loan.

More on compound interest

But there are ways you could reduce the total cost of borrowing of your lifetime mortgage.
 

How could a drawdown lifetime mortgage reduce my cost of borrowing?

You could potentially save thousands over the course of your plan with a drawdown lifetime mortgage. This is because you only pay interest on the funds you release. 

With a drawdown lifetime mortgage, you only take out the money when you need it. This can help reduce your total cost of borrowing, as interest is only charged on the money you release, rather than the full amount available.

You could also reduce the cost of borrowing on a lifetime mortgage by:

Making repayments
You have the option to make ad-hoc or regular repayments to help reduce your total cost of borrowing. Even if you can only make small repayments, it will help reduce the amount of interest you pay over the lifetime of your loan.

Remortgage to another equity release plan in the future
If interest rates reduce in the future, you may have the option to remortgage your current plan to secure a lower rate. Getting a lower rate isn't guaranteed and you may need to consider early repayment charges if you choose to remortgage. 

More on lump sum vs drawdown lifetime mortgage
 

How much equity could I release?

How much you could release depends on several things:

  • Your age

  • Your health and lifestyle

  • Your property’s value

By using our free, no-obligation equity release calculator, you can see how much you could release in under 60 seconds.

The results provided will show you the plans you may be eligible for from across the whole market, the amount you could release with different providers, their current interest rate and any benefits that come with the plan.

You can take out equity release if you still have an existing mortgage or any secured loans on the property. However, you must repay them, and the funds you release can be used to do this. Any money left over belongs to you.
 

Is equity release right for you?

If you're considering unlocking funds from your home, we recommend that you make sure equity release is right for you. Helping you understand equity release and finding out whether it is right for you is our primary role. Both you and your expert equity release adviser must be sure it is before going ahead.

If you want you find out more about equity release, use our free calculator or download our free guide to find out more.
 

What are my other options?

An expert adviser can discuss your needs over the phone, face to face or via video appointment and explain more about equity release. They’ll always tell you if equity release isn’t right for you and there’s absolutely no obligation to go ahead.

Before deciding on equity release, it's important you're aware of some of your other later life finance options, which may include:

 

What happens next?

Releasing some of the funds from your home doesn’t have to be complicated. We’ve laid out all the steps for you so you can understand the process. Your equity release adviser will also keep you updated every step of the way.

Step 1: See how much equity you could release
Get a free, no obligation quote using our equity release calculator to see how much you could release from your home. It compares the whole market to find an equity release plan that could suit you.

Step 2: Advice and recommendation
You need to book an initial consultation with your local, independent equity release adviser at a time that suits you. Following this, if equity release is right for you, your adviser will look at all the products available on the market and provide you with a suitability report. They will then book a second consultation with you to provide you with a personalised product recommendation based on your circumstances.

Step 3: Application
Once you’re satisfied the plan suits all your needs, your adviser will complete an application form and deal with all the supporting documentation needed. Your home will then undergo an independent, professional valuation at a time suitable to you. You'll then be issued with a lifetime mortgage offer following a satisfactory valuation including full terms and conditions of your plan for your approval.

Step 4: Completion
Once you accept the offer, legal paperwork is coordinated by your solicitor and it could take approximately 8 to 12 weeks from application to completion (timescales can't be guaranteed as each application is unique). You’re then free to enjoy your tax-free cash.

Ready to take the next step or need more information? Call The Equity Release Experts to arrange a free, no-obligation initial appointment on 0800 188 4812 (lines open Monday-Friday 9am - 5.30pm). Alternatively, download our free equity release guide.

What our customers say

There’s a good reason we’re called The Equity Release Experts – but you don’t just have to take out word for it!

Our customers have rated us ‘Excellent’ on Trustpilot after helping them free up some of the funds locked in their homes. And we could do exactly the same for you too!

Your other options

Before deciding on equity release, it's important you're aware of some of your other later life finance options, which may include:

Retirement interest-only mortgage
Retirement repayment mortgage
Or see if equity release is right for you

Equity release costs

Knowing the costs associated with equity release and how to help manage them is important.

Compound interest explained
Lump sum vs drawdown lifetime mortgage

Things to consider

If you are considering unlocking cash from your home, we recommend that you make sure equity release is right for you
  • You should always think carefully before securing a loan against your home to repay existing debt
  • The loan, plus compound interest, is typically repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care
  • Unless you decide to go ahead with a plan, our service is completely free of charge, as our fixed equity release advice fee of £1,799 is only payable on completion of a plan