Is it right for you?

If you decide to release equity from your home, you should be absolutely sure that it’s right for your needs and circumstances. While you will have to seek professional advice from a qualified adviser before taking out any equity release plan, we can share this general information to help ensure you’re well-informed.


Points to consider before you choose equity release


  • Equity release is repaid once you and your partner have either passed away or moved into long term care. At this point the house is sold and the money owed is repaid to the provider.

This means that equity release is a big commitment, generally made for life. If you decide that you would like to pay the money back early, you will probably face an early repayment charge set by your provider.

  • Both your tax position and any entitlement that you have to state benefits could be affected by the decision to release equity from your home. Expert advisers will be able to determine what this effect will be to help you appreciate the full implications of equity release on your financial circumstances.
  • Equity release will reduce your estate’s value.
  • It is recommended that you consult with your family and allow them to become involved in the process with you. This could involve inviting your family to accompany you during any meetings with your adviser – a good opportunity for them to find out how equity release could affect them, and to allow them to support you throughout the process.
  • You should always consider the alternatives before deciding to go through with equity release.
  • You should always think carefully before securing any debt against your home.
  • If you take out a lifetime mortgage, it will accumulate compound interest – meaning that the total sum owed can grow quickly.


Alternatives to equity release


Equity release will not always be the right decision, and it’s important to know that there are choices out there. These alternatives may be a better fit for your circumstances, so please consider them before you turn to equity release.


Downsizing – When you downsize, it is often possible to buy a smaller and less expensive property without the need for a mortgage, and sometimes with extra cash to spare. No monthly mortgage payments will generally result in more money to spend on other expenses, whether that means essentials or luxuries. Of course, it also means that you have to leave your home and either relocate to another area or move into a smaller property.


Loans/Traditional Mortgages – If you’re satisfied that you’ll be able to make the monthly repayments, a loan or traditional mortgage can be an alternative option for raising funds. While it has traditionally been more difficult for people over the age of 50 to secure a mortgage, there are now more options available, with a number of lenders offering services targeted towards older borrowers.


Family/Friends – Depending on the relationship that you have with your family and friends, and their own financial situations, you may be able to get financial support from them. While it is easy to avoid talking about what you might feel is a sensitive issue, your loved ones may be delighted to help once they realise that you’re struggling.


Savings/Investments – If you have savings or investments that cover your financial needs then these should be your first port of call. That said, it may depend on what you need the money for; some people prefer to keep a small amount of savings set aside for specific emergencies. You also may want to keep investments in place if they are providing a regular income.


There is also the possibility of using both savings and equity release, as the money raised through an equity release plan could supplement the funds you already have from savings or investments.


Benefits – Many people are entitled to state benefits that they don’t know about and therefore don’t claim, even though in many cases they could be the difference between financial difficulty and comfort. There are resources on Citizens Advice or to help you determine how much you may be able to claim.

Access to over 50 plans