Is equity release safe?


Are you looking to make some home improvements, help your family out with funds, or live more comfortably in retirement? If you are aged 55 or over and a homeowner, releasing some of the equity from your home could be the boost to your finances that you have been searching for.

However, you may be asking yourself ‘is equity release a safe option?’ Here at The Equity Release Experts, this is a question we can help answer.
 

How safe is equity release?

Many of our customers ask, ‘is equity release safe?’ In the UK, equity release is regulated by the Financial Conduct Authority (FCA) for your protection and security. Here at The Equity Release Experts, we are authorised and regulated by the FCA, and pride ourselves on our clear, fair processes and recommendations.

We’re also members of the Equity Release Council (ERC) and adhere to its high standards of conduct. All plans we recommend meet the Equity Release Council standards and include the no-negative equity guarantee, so you will never end up owing more than the value of your property. Plans meeting the ERC’s standards also ensure that you have the right to remain in your property for life – or until you move into long-term care – as well as the right to move home (subject to provider criteria).

If you are unsure whether equity release is a safe option for you, get guidance from our expert equity release advisers you can trust and call us on 0800 188 4812 or request a callback.
 

What are some of the potential downsides of equity release?

As with any financial product, there are certain risks and disadvantages to be aware of when it comes to equity release.

With a lifetime mortgage, the most popular type of equity release, one of the main things to note is the effect of compound interest and how this can increase your debt over time. As you won’t be making any monthly repayments, the debt will grow with the interest added onto interest.

Other potential drawbacks of equity release include that it will reduce the value of your estate, and may affect your entitlement to means-tested benefits now – or in the future.

With a lifetime mortgage, it is designed to last the rest of your life and to not be repaid, if at any point you wish to pay it off earlier than planned, you will incur early repayment charges.

WIth a home reversion plan, you will no longer be the legal owner of the property and you will receive less than the market value when it is sold to the home reversion company. 

At The Equity Release Experts, our advisers are always on hand to review your circumstances and help you explore your options. After researching the whole of market, your adviser will give you a personalised recommendation. They'll also let you know if equity release isn't the correct option for you. 
 

How can we help?

 

We specialise in offering reliable equity release advice. If you want to find out whether it could be the right choice for you, we can help you. Our expert team can be contacted on 0800 188 4812 (lines are open Monday-Friday, 9am-5.30pm), by email at [email protected] or you can request a callback.

 

Things to consider with equity release:

  • A lifetime mortgage is a loan secured against your property. Typically there are no monthly repayments to make, as the loan plus roll up interest is repaid when the plan comes to an end. Usually, that’s when you, or the last-remaining applicant, either passes away or moves into long-term care.
  • Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits.
  • Unless you decide to go ahead, The Equity Release Experts’ service is completely free of charge as our usual advice fee of 1.99% of the amount released would only be payable on completion of a plan, subject to a minimum advice fee of £1,499.