Pros and cons of equity release

If you’re wondering what the advantages and disadvantages of equity release are, allow us to help. Here at The Equity Release Experts, we pride ourselves on our honest, friendly and reliable advice. Equity release, much like all other financial products, isn’t a one-size-fits-all solution, and that’s why we’re always on hand to help you fully understand whether it’s the most suitable option for you.

As with any big financial decision, you should always seek expert advice before going ahead. During your appointment, our expert equity release advisers will review your circumstances to let you know if equity release is the right option for you. In the meantime, you’ll find some of the pros and cons of equity release below.

Advantages of equity release

Different options to access your money

With a lifetime mortgage, the most popular form of equity release, you can choose how and when you’d like access to your money. With The Equity Release Experts, you could either release a one-off tax-free lump sum, this is a lump sum lifetime mortgage. Or, after releasing an initial amount, you could choose to release further amounts in stages as required – a plan known as a drawdown lifetime mortgage. The other form of equity release is a home reversion plan, this is where you sell part or all of your home in return for a cash lump sum.

Added Protection

We’re authorised and regulated by the Financial Conduct Authority (FCA) – whose role is to protect customers and enhance the financial market’s integrity. When you come to us for equity release advice, you can expect our processes and recommendations to be clear. In addition, plans meeting the Equity Release Council standards provide extra safeguards such as the no negative equity guarantee, meaning you can never owe more than the value of your property.

Remain in your home

An additional advantage to equity release is that you can remain in your home, even after you have released funds from it. If you have no plans to move, or in fact want to use the money to renovate, you can continue living there until the plan comes to an end, usually when you or the last remaining applicant passes away or moves into long term care.

Disadvantages of equity release

Reduction in your estate

One disadvantage of a lifetime mortgage worth bearing in mind is the amount to be repaid can grow quickly due to compound interest. Your adviser will explain everything about compound interest during your appointment.

Reduction in inheritance for your family

Another drawback to equity release is that it will reduce the amount of inheritance your beneficiaries could otherwise receive. 

Early repayment charges

Equity release is designed to last for the rest of your life, so if you decide to pay it off early, an additional disadvantage is that you could incur an early repayment charge.

Come to the experts to discuss the pros and cons of equity release

Whether you’d like to discuss the pros and cons of releasing equity from your home, or want to discover the range of equity release plans that could help you boost your finances in later life, call us on 0800 188 4812 or fill in our callback form to speak to one of our dedicated, fully qualified equity release advisers. Lines are open Monday-Friday 9am-5.30pm.


Things to consider with equity release

  • A lifetime mortgage is a loan secured against your home.

  • With a lifetime mortgage there are typically no monthly repayments to make as the loan, plus roll up interest, is repaid when the plan comes to an end.

  • Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits.

  • Unless you decide to go ahead, our service is completely free of charge as our fixed advice fee of £1,499 is only payable on completion of a plan.