Equity Release
Enjoy your later years with the equity from your home
If you’re a homeowner aged over 55, equity release, in the form of a lifetime mortgage, could free up the capital locked in your home. How you choose to use this cash is up to you. Perhaps you’d like to help your family, make home improvements, gift an early inheritance or simply enjoy your retirement with more disposable income. Whatever your plans, you must seek independent advice before deciding whether equity release is the right option.
Is equity release right for you?
Equity release is not a decision to make lightly. While a lifetime mortgage offers several benefits, it might affect your entitlement to state benefits, reduce your capacity to pay for long-term care and impact the inheritance you pass down to family members. As qualified and regulated equity release advisers and members of the Equity Release Council [link to https://www.equityreleasecouncil.com/adviser/1avid-grimshaw], you can trust we’ve got the expertise and professional standing to help you make an informed decision.
Before making any recommendations, we’ll take the time to understand your specific circumstances and aims fully. We’ll discuss your options, ensuring you’re equipped with all the facts. If a lifetime mortgage is for you, we’ll search the market for the most competitive deals that meet your needs and take care of your application. With everything in hand, you can plan how to spend your equity release funds.
For help securing a lifetime mortgage, get in touch for a free, no-obligation chat with a mortgage adviser.
Equity Release FAQs
What is equity release?
Equity release is a way of turning some of your home’s value into cash. A lifetime mortgage is a form of equity release.
How does a lifetime mortgage work?
A lifetime mortgage is a loan secured against the value of your home that allows you to release tax-free cash. You can take the money in a single lump sum or in smaller amounts over time. You retain ownership of your home and can still live there.
Unlike a standard residential mortgage, you don’t make monthly repayments, and the interest is rolled up. The loan is repaid when you die or move into long-term care.
Who is eligible for a lifetime mortgage?
The criteria for a lifetime mortgage are as follows:
- You’re over 55.
- You’re a homeowner of a UK property that is your primary residence.
- Your property is worth at least £70,000 and is in reasonable condition.
- You have little or no mortgage left on your property.
What are the benefits of a lifetime mortgage?
Lifetime mortgages offer several benefits, including the following:
- Tax-free cash: The money released from a lifetime mortgage is tax-free, and there are no restrictions on how you can use it.
- No monthly repayments: Unlike traditional residential mortgages, you don’t make monthly payments with a lifetime mortgage.
- Retain home ownership: You still own your home and can live in it for the rest of your life or until you move into long-term care.
- Protection and guarantees: Reputable lifetime mortgage providers often include a “no negative equity guarantee”, ensuring the debt will never exceed the value of your home. Also, some lifetime mortgage providers offer the option to ring-fence a portion of your home’s value to ensure a guaranteed inheritance for your beneficiaries.
- Improved quality of life: By unlocking the equity in their home, you’ll have access to cash to enjoy in your later years.
What are the drawbacks to lifetime mortgages?
If you’re considering taking out a lifetime mortgage, it’s essential to be aware of the drawbacks, which include the following:
- Reduced equity: Interest on the loan compounds over time, which can grow the debt and significantly reduce the equity left in your property.
- Reduced inheritance: The amount left for your beneficiaries can be substantially reduced.
- Impact on state benefits: Funds received from the lifetime mortgage can affect your eligibility for means-tested state benefits.
- Early repayment charges: If you decide to repay the loan early, significant early repayment charges may apply, making it expensive to exit the arrangement prematurely.
- Market fluctuations: Your property value may not increase as expected or could even decrease, affecting the amount of equity available and your overall financial plan.
- Impact on moving: If you want to move, there may be restrictions or additional costs if the new property isn’t acceptable to the lender.
Is equity release the right option for you?
Whether equity release is right for you depends on your circumstances, including your age, income, and plans for the future. A qualified and regulated equity release adviser can help you make an informed decision.
