What is equity release?

Equity Release is a financial product that allows people over 55 to release some of the equity (cash) tied up in their property, without them having to move or sell their house.

Safety

With all Equity Release Council approved plans there is a ‘no negative equity guarantee’ which means you and your family will never owe more than the value of your home.

Your future

Home equity release can be an ideal way of supporting yourself in later life or simply used to give your bank balance an extra cash boost!

Types of Equity Release Schemes

Lifetime mortgages and home reversion plans are the two main types of equity release plans. We can advise you on both of these equity release products, making sure you are aware of the advantages and disadvantages of both.

You can access the fund as a lump sum or drawdown the cash in stages depending on the type of plan you choose. There are no monthly payments, the interest rolls up and is only payable when the property is sold.

You can spend the tax-free cash however you like as it is your money.

Some people choose to keep the equity tied up in their properties to leave as an inheritance for their loved ones. However, more and more people are now choosing to release some of their equity to boost their retirement lifestyle.

With all Equity Release Council approved plans there is a ‘no negative equity guarantee’ which means you and your family will never owe more than the value of your home.

Equity release is a solution for those who wish to pay some or all of the interest or make capital repayments to prevent the debt from rising.

Some homeowners worry that taking out a roll-up Lifetime Mortgage means the size of the loan increases as the interest on the initial loan accumulates over time.

Plans from several providers now address these concerns by offering the homeowner the opportunity to either pay some or all of the monthly interest on the loan and/or make ad-hoc lump sum capital repayments.

Either - the homeowner is given the option to pay all or part of the interest for a fixed period (for example, 1year, 5 years or even up to the lifetime of the loan).

From the end of the interest payment period, the interest on the loan rolls up at the rate agreed at the start of the contract.

If the homeowner decides they no longer want to pay the interest during the period agreed, the loan reverts to a roll-up Lifetime Mortgage and no further monthly interest payments are required.

Or – the homeowner can pay a percentage (typically 10%)of the original amount borrowed each year without penalty. There is no compulsion attached to this facility.

Benefits of equity release

The debt does not rise as fast if some or all of the interest is being paid or a capital repayment is made.

Interest or capital payments can come from the homeowners own income or their children/beneficiaries can provide the funds.

Unlike a conventional mortgage, homeowners have no risk of losing their homes if they do not keep up interest payments or fail to make a capital repayment, making it far safer.