Benefits of an equity release plan
Benefit from future property price increase
If you take out a lifetime mortgage, the most popular type of equity release, you could benefit from any future increase on your property. This is good news because you may be able to release more money in the future if you wish to.
Never pass debt on to your loved ones
There are guarantees with some plans to make sure you can never pass on debt, or ‘negative equity’, in your estate.
Move home in the future
If you wish to move home in the future, this is possible. It’s a rule of the Equity Release Council that a lifetime mortgage can be transferred or ‘ported’ to another property. Naturally the new property must be acceptable to the lender at the time of looking to transfer the lifetime mortgage, and they may expect that part of the loan is repaid if downsizing to a property of lower value - without any early repayment charges.
There are no requirements to make monthly repayments
Lifetime mortgages don’t require any regular repayments. Instead, a fixed or variable rate of interest is rolled-up against the loan so that you have nothing to pay during your lifetime. Then when you pass away, or move into long-term care, the house is sold and the loan, including the interest, is paid off with the remaining money passing to your estate.
To find out more about the different plan types available to you and what other things need to be considered, please follow this link »
Who could release equity?
In general you may be eligible to release funds from the value of your property if:
- ✔You own your own home; and
- ✔the youngest homeowner is 55 or over.
It is also a condition that you use some of the money you receive to pay off any mortgage you may have against the property or secured loan you may have against the property. Of course, this can be of great benefit to many, as one of your regular outgoings becomes a thing of the past.
However, equity release is not suitable for everybody which is why it is so important to speak to an independent specialist before you make a decision.
Our phone lines are open 24 hours a day, 7 days a week, and there are no automated systems, please call us on Freephone 08080 555 222 to get all your questions answered.
Why has it become so popular?
There has been significant growth in the equity release market over recent years with approximately 500 plans available at the start of 2021 compared to 58 plans in 2016. Lenders have developed their plan features to suit current demands and there are now plans that allow you to take income each month, make repayments on the interest and a host of other options for a wider range of people than ever before.
Lenders have also continued to keep their lifetime mortgage interest rates low and, in some cases, are still contributing to plan set‑up costs. The steady increase of UK house prices over the last five years have also contributed to the growth of equity release, as the value of your home impacts on the amount of money that you can release.
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.
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.
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Things to consider
As multi-award-winning equity release specialists we provide informative impartial advice covering your options as well as explaining how equity release will affect potential inheritance and how your entitlement to 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 £1,795 be payable.
Equity release requires paying off any existing mortgage. Any money released, plus accrued interest to be repaid upon death, or moving into long-term care.