Equity Release

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Equity Release
Equity Release
Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.

For most people their house is their biggest asset.

If you’re facing a pension shortfall, need to meet an unexpected expense or want to fund a retirement treat, then an equity release loan may be an option. It allows you to tap into the wealth you’ve accumulated in your property without the hassle of having to move.

While interest in the equity release loan sector continues to grow, there are many factors that consumers should consider before taking out a plan.

If you’re looking to take cash from the value of your home then an equity release loan could be an option, but there are drawbacks which need to be considered. Customers must be over a certain age, be willing to take out a plan for life and fully understand the impact equity release will have on their finances.

Please download our Guide to equity release fact sheet for the latest advice or get in touch. We will put you in touch with a partner company, Key Retirement, who will be able to help you further. Key Retirement offer the over 55s independent, expert, financial advice. They have helped more than 1 million people understand if equity release is right for them, always looking to meet customers’ changing retirement needs and delivering new ways to help their customers with their retirement finance planning.


Our Services & Expertise

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.

Equity Release is a lifetime mortgage or home reversion scheme. To understand the features and risks, ask for a personalised illustration. We will be able to refer you to a qualified equity release solicitor near you.

Lifetime Mortgages

With a lifetime mortgage, you borrow a proportion of your home’s value. Interest is charged on the amount. Under a Lifetime Mortgage you can choose to either pay the interest each month to avoid the debt increasing (Interest Only Lifetime Mortgages) or simply allow it to be continually added to the amount borrowed (Roll Up” Lifetime Mortgage). If the interest is compounded or ‘rolled up’ over the period of the loan, it may mean your debt would almost double in 11 years at current rates.

Home Reversion Schemes

With a home reversion scheme, you usually sell a share of your property to the provider for less than the market value. You have the right to stay in your home for the rest of your life if you wish. When you die or move into long-term care and the property is sold, the provider gets the same share of whatever your home sells for as repayment. For example, if you sold 50% of your property to the provider, it would get 50% of the sale price.

Find out more in our Equity Release video below.

Deciding to take out equity release is one of the most important and long-term decisions consumers make in later life. According to the Financial Conduct Authority, where customers were suitably advised, there have been some good outcomes whereby they ended up with an equity release product that met their long-term needs. In these cases, consumers benefited from the stability of a long-term fixed interest rate, unlocked wealth from their main or only asset, and not had to make monthly interest payments. When sold correctly, equity release products have allowed consumers to:

  1. repay their existing mortgage
  2. carry out home improvements, essential household repairs and adaptations
  3. consolidate burdensome debts
  4. reduce their working hours or fund earlier retirement

However, when given unsuitable advice, they can suffer major harm which affects them for the rest of their lives. In some cases, ending these contracts or repaying the amount owed early can be un-affordable. The quality of advice you receive clearly matters.

Your home may be repossessed if you do not keep up repayments on your mortgage.

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.

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