What is equity release?

Equity release is when you choose to release some of the funds that have built up in your home since you bought it. It’s potentially becoming an important part of future retirement planning – and can be used to make your retirement more comfortable, or to open up exciting new possibilities.

What can equity release be used for?

All kinds of things, including topping up your retirement income, paying off a mortgage, to make home improvements and other things, too.

Releasing equity from your home means you will have access to those funds to do with as you please – it’s up to you to choose how you spend it.

For example, it can be used to:

  • Top up your retirement income
  • Pay off a mortgage
  • Make home improvements
  • Buy a holiday home
  • Help your children get onto the property ladder

Whether you choose to take the amount as a lump sum or regular income (or a combination of both), a property equity release scheme can potentially help you make the most of your retirement without having to leave your home.

It’s worth noting that as equity release advisers we are also regulated by the Financial Conduct Authority (FCA) – which offers homeowners considerable security.

What are lifetime mortgages?

There are two types of home equity release scheme available in the market, with several variations on each. One is a lifetime mortgage. The other type of home equity release scheme is a home reversion plan.

With a lifetime mortgage, you take out a new loan secured on your property. Typically you do not make repayments, instead interest is rolled up to be paid when the scheme is ended. You continue to own and live in your home.

After you and your partner have died or moved into long-term care, your house is sold and the amount you borrowed, including rolled-up interest, is paid to the lender. Anything left over, after costs, passes to your, or your partner’s, estate.

Lifetime mortgage providers are regulated by the Financial Conduct Authority (FCA).

*Important Notes
Please remember, that if you do choose to release equity from your property that it may affect your tax position and/or any benefits you receive from the state. That’s why we believe it’s important to seek advice from an independent, specialist equity release financial adviser who will explain it all to you. They can also give you a personalised illustration of the different equity release schemes available.

It’s also advisable to obtain specialist equity release legal advice for you and your family.

For peace of mind, always choose an Equity Release Council (formerly SHIP) member provider for your equity release needs.

To understand the features and risks of an equity release scheme ask for a personalised illustration.

There may be a fee for mortgage advice. The precise amount will depend upon your circumstances, but we estimate it will be £295.