Equity Release is a way of freeing up some of the cash (equity) tied up in your home to enjoy a retirement to remember. The tax-free money you release is yours to spend as you wish, whether that’s for home improvements, holidays or helping your family such as your children / grand children to get on the property ladder.
Depending on the plan you choose, the money can be released in one lump sum or smaller amounts over time. The amount you can borrow depends on the plan you choose, your age, the value of your home and the equity available.
To qualify for Equity Release you (or both you and your partner) must be over 55 years old, must own your own home (worth at least £70,000) and live in mainland UK or Northern Ireland. Your home must also be a residential property of standard UK construction.
With the Equity Release Mortgages (Lifetime, Drawdown and Interest Only) you still own your home; you are simply borrowing money against it. If you choose the Home Reversion Plan, the ownership of all or part of your home is transferred to the lender. In all cases you continue to live in your home until you die or move into permanent care.
There are four main types of Equity Release:
While many retired people choose to release the equity from their homes, without proper preparation there can be some potentially negative consequences.
For example, any equity release plan will ultimately reduce the overall value of your property, and accessing the property’s cash value could potentially impact the state benefits you’re entitled to.
If you’re in the correct age bracket and you’d like to spend the cash that’s tied up in your property, equity release could be right for you. However, it’s vital that you get professional advice from an independent financial adviser before embarking on this journey.
*To make sure we can offer the best possible service, our equity release products are provided by our preferred 3rd party partners.
Secured Loan Representative Example: If you borrow £15,000 over 10 years at an annual interest rate of 7.40% you would make 120 payments of £202.03 per month. The total amount repayable will be £24243.55 (This includes a lender fee of £595 and a broker fee of £1500 which have been added to the loan). Total charge for credit will be £9243.55. Overall cost for comparison is 10.456% APRC representative. The Personal Finance Centre is a leading broker and not a lender.
Rates from 4.99% APR. We have a range of plans and rates allowing us to help customers with a range of credit problems.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
If you are thinking of consolidating existing borrowing you should be aware that you may be extending the term of the debt and increasing the total amount you repay.