Is equity release the right choice for me?

Find out more about releasing tax-free cash from your home.

Equity release means accessing your home’s value without selling: common questions answered
Equity release means accessing your home’s value without selling: common questions answered

Equity release is a way of accessing a percentage of your property value while still living in your home. The money that you release is tax free and can be taken as a lump sum or in smaller instalments as and when you need it.

With the most popular form of equity release, a lifetime mortgage, you also continue to own 100 per cent of your home. The amount of money that you can access is determined by the age of the youngest homeowner and the value of your home. The lowest amount is £10,000 and the highest is 58% of your current house price.

You must be at least 55 years old to consider equity release and your home must be worth £70,000 or more.

One of the main benefits of equity release for many people is that it provides you with a tax-free lump sum of cash and you’re not required to make any repayments if you don’t wish to.

Enjoy spending the money

Even if you still have a mortgage on your home, you can still take out equity release. You will need to use some of the money that you release to repay your existing mortgage, but once you have done that, the rest of the money is yours to enjoy spending.

You may want to make your life more comfortable by having more disposable income each month, or you could carry out those home improvements that you’ve been meaning to. Some people even use the money to provide a financial gift to their family.

How does it work?

The money that you release, plus the interest that you accrue, is repaid when you die or go into long-term care and your property is sold.

Over the last five years the rise in popularity of equity release means that there are now more plans on the market than ever before.

There are now plans that allow you to pay off some of the interest each month and you can choose the percentage that suits you. By paying a percentage of the interest, you can reduce the amount of debt that is being rolled up.

Safeguarding for your loved ones

There are also plans that allow you to safeguard a percentage of your property value so that you can pass this on to your loved ones.

You may also be concerned about passing on debt to your family, but all equity release plans come with a no negative equity guarantee which means that you can never pass on the debt to your estate, providing the property is sold for a reasonable amount.

Get advice

An equity release advisor will explore all options with you, and will tell you everything you need to know about equity release including the effect on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected now or in the future.

Age Partnership provides access to a free equity release quotation outlining what equity release could mean for you.

You’re under no obligation to proceed with anything that is recommended to you.

Only if you choose to proceed and your case completes would a typical fee of £1,795 be payable.

What's involved?

Equity release may involve a home reversion plan or a lifetime mortgage which is secured against your property.

To understand the features and risks, ask for your personalised illustration. Although there are no monthly repayments required with equity release, any money released, plus accrued interest, would be repaid upon death, or moving into long-term care.

To request your FREE guide click here, or to find out more, call freephone 0808 5001 522.

*The UK’s number 1 equity release advisor is based on the volume of plans from a panel of lenders Q1 2021 – Q3 2021.