Home reversion plan
A home reversion plan allows you to exchange the ownership of some or all of your property for a lump sum of cash, along with the right to stay in your property, rent-free, for as long as you live subject to the lenders terms and conditions. This is also known as a 'lifetime lease' and is only available to those who are aged 65 or over.
- ✔ The cash you release is tax free and can be spent how you wish.
- ✔ There are no monthly repayments to make as no interest is payable.
- ✔ You can benefit from any future increase in the value of your property from the proportion you retain.
- ✔ The older you are, the more money you will generally be able to release.
- ✔ You can typically raise a larger sum from your home with a reversion plan than would be available with a lifetime mortgage.
- ✔ Plans are portable which means it is possible to move home in the future.
- ✔ You can remove your home entirely from your estate in terms of inheritance tax.
- ✔ You know at the outset what share of your home you will be leaving to loved ones in your estate.
- ✔ You are able to guarantee an inheritance with the remaining part of the property.
- ✔ Plans can allow you to protect an inheritance for your family.
- ✗ If you sell 100% of your property, there will be no property value to leave to your beneficiaries.
- ✗ There is no scope to return for further funds in the future when you sell all of your property.
- ✗ If you die shortly after taking out a home reversion scheme, your estate will receive less as the full market value is not given at the outset.
- ✗ It’s expensive to reverse - the property would have to be purchased from the reversion lender at the full market value.
- ✗ Your tax position and eligibility of means-tested benefits may be affected now and in the future.
- ✗ Not available to anyone under the age of 65.
- ✗ If you wish to buy back the proportion of your house you sold then this would have to be bought back at market value and not at the discounted rate you sold it for.
Other alternatives to equity release
An equity release plan is not the only option if you wish to free up some cash in retirement. Downsizing the property, or borrowing money from a close friend or family member, could be a preferable alternative to releasing equity from the home.
Please call us today for a no-obligation chat on Freephone 08080 555 222. Our friendly advisors are ready to answer any questions you may have.
Equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. To understand the features and risks, ask for a personalised illustration.
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Things to consider
As multi-award-winning equity release specialists we provide impartial advice covering your options as well as explaining what impact a plan could have on the size of your estate and if your entitlement to current and future means-tested benefits could be affected now or in the future.
We provide initial advice for free and without obligation. Only if you choose to proceed and your case completes would a typical fee of 2.2% of the amount released be payable.
Equity release requires paying off any existing mortgage. Any money released, plus accrued interest would be repaid upon death, or moving into long-term care.