If you’re a homeowner aged over 55, with a property worth at least £70,000, equity release is a way for you to free up some of the money tied up in your home, in the form of tax-free cash.
This is either done through a ‘lifetime mortgage’ or ‘home reversion’ plan.
A lifetime mortgage is a loan secured against your home, there are options where you can make monthly payments and options where you don’t have to make any monthly payments at all. The lifetime mortgage is only repaid when your property is sold; either when you downsize or when you and your partner have both passed away or moved into long-term care.
A home reversion plan allows you to sell some or all of your home to a home reversion provider in return for a lump sum or regular payments.
As independent experts in the local area, we‘ve got many years experience of helping clients use equity release to help with their retirement funding.
The money can be used however you wish. It should give you the flexibility to increase your options.
You can use the money however you like, such as:
- help your grandchildren with student fees or to get on the property ladder
- use it to pay for a special holiday with all your family
- make home adaptations so you can stay in your own home for longer
- pay medical bills, home care or legal fees
- buy a new car, motorhome or caravan
- fund a new hobby and leisure activities
With the schemes we recommend, you will receive a ‘no negative equity’ guarantee which means you will never owe more than the value of your home. Both ‘lifetime mortgages’ and ‘home reversion plans’ are regulated by the Financial Conduct Authority and the Equity Release Council.
Equity release will reduce the amount of inheritance you can leave. It may also affect your tax position and your entitlement to means-tested benefits. This is why we always recommend that we meet face to face with you and try to get the wider family involved to make sure it’s the right course of action.