Independent Options Guide to Equity Release
If you are looking to improve your finances an equity release
or home reversion scheme could be the ideal solution for you.
Equity release is a lifetime mortgage.
Home reversion is where all or part of your home
is sold to a home reversion company
What is equity release?
Equity release schemes give homeowners a way to turn some
of the value of their homes into cash - a lump sum, regular
extra income, or sometimes both. You can live in your home
until you and/or your partner dies provided your lifetime
mortgage or home reversion scheme is in joint names. The property
is then sold and the proceeds used to pay the accrued debt.
Any surplus will form part of your estate.
How much is available to me?
The maximum amount of any equity release is determined by
your age, health and property value. The amount will vary
between different lenders and the type of scheme you chose
Is equity release right for me?
Equity release schemes can be a safe and practical way of
unlocking the cash that's locked up in your home, but they
are not always suitable for everybody, and you should always
consider other options such as family support or moving home.
Typically, equity release may be suitable for people:
who are over 55 (the minimum age for most UK schemes);
who own a property worth at least £80,000;
who want to remain in their current home rather than
downsize the value of their property by moving home in order
to release capital.
Why do people choose equity release?
People may decide to release the equity in their home for
many reasons. For example you may want to:
pay for home improvements or adaptations;
pay for a holiday or new car;
pay for immediate or future care needs;
reduce inheritance tax liabilities for your family
by reducing the value of your home;
fund education fees, for example to help grandchildren
through university; or
clear any outstanding debts.
How you spend the money is really up to you.
Things to consider before effecting an equity release scheme;
Consider moving to a smaller home
Consult your family. An equity release scheme will
affect the size of any legacy you may to leave.
Check your entitlement to benefit. Taking out any
form of equity release could adversely affect your entitlements
to means-tested benefits or support.