Equity release refers to a range of products that let you access the equity (cash) tied up in your home if you are over the age of 55. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.
Equity release may require a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration.
After the initial bad press in the early years, Equity release Mortgages are now becoming an accepted method of managing finances for the over 55s. They can significantly improve your financial situation, giving you a more comfortable retirement.
There are two main types of equity release: lifetime mortgages, which allow you to borrow money against your house; and home reversion, whereby you sell a share in your house.
- Lifetime mortgage: you take out a mortgage secured on your property provided it is your main residence, while retaining ownership. You can choose to ring-fence some of the value of your property as an inheritance for your family. You can choose to make repayments or let the interest roll-up. The loan amount and any accrued interest is paid back when you die or when you move into long-term care.
A lifetime mortgage is a loan secured against your home. To understand the features and risks, ask for a personalised illustration.
- Home reversion: you sell part or all of your home to a home reversion provider in return for a lump sum or regular payments. You have the right to continue living in the property until you die, rent free, but you have to agree to maintain and insure it. You can ring-fence a percentage of your property for later use, possibly for inheritance. The percentage you retain will always remain the same regardless of the change in property values, unless you decide to take further cash releases. At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership
This is a home reversion plan. To understand the features and risks, ask for a personalised illustration.