What is equity release?

Equity release is a financial product that helps people over the age of 55 release the cash tied up in their home.

Let's look at the different types of equity release.

I'd like a lump sum of money.
If you'd like to release a lump sum of cash from the value of your home, a LIFETIME MORTGAGE could be for you. There is no requirement to make monthly repayments, as the amount you release, plus any interest, is repaid from the money made when the property is sold. This is usually when you die, move into long-term care or permanently leave the property.

There are plans which allow you to make adhoc payments to the interest or capital, to reduce the impact of equity release on your estate.
I'd like flexible access to my money.
If this is the case, a DRAWDOWN MORTGAGE may be your best option. It's similar to a standard lifetime mortgage, but you can access your money with more flexibility. Rather than just receiving a lump sum upfront, you can choose to release your cash over time, as and when you need it. Because you only pay interest on the cash that you have taken, these plans can often prove to be more cost-effective when compared to taking a lump sum.
I'd like to pay off some of the interest.
An INTEREST ONLY LIFETIME MORTGAGE might be right for you. You make regular monthly payments to reduce the effect on the value of your estate. Some plans allow you to make monthly repayments that are equal to - or less than - the amount of interest charged. The balance is paid off from the value of your estate once you've died or moved into long-term care.
I'd be open to selling a portion of my home..
You may want to consider a HOME REVERSION PLAN. This will allow you to exchange the ownership of some or all of your property for a lump sum of cash. You retain the right to stay in the property, rent-free, for as long as you live. However, you will receive substantially less than the true value of the property.
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* Equity release may involve a home reversion or a lifetime mortgage, which is secured against your property. To understand the features and risks, ask for a personalised illustration. Equity release requires paying off any existing mortgage. Any money released, plus accrued interest would be repaid upon death, or moving into long-term care

Why have equity release and lifetime mortgages increased in popularity in recent years?

Property prices may have fluctuated over the years, but it’s still likely that your home is your biggest asset and may be worth considerably more than you first paid for it. This could mean that you have a sum of money locked into the value of your home that’s worth more than your savings and income.

Releasing equity from your property could allow you to fund future plans.

  • The Financial Conduct Authority (FCA) regulate all lenders for peace of mind.
  • Plans are flexible to suit your personal needs.
  • With a Lifetime Mortgage, you’ll still own your home and may benefit from future rises in its value.
  • You can relax knowing you’ll never pass on debt to your estate.
  • You can choose a portable plan if you wish to move house in the future, depending on lender criteria.

People decide to use equity release for a number of reasons, here are some important things to consider...


While most people I speak to feel at home in their property and don’t want to move, it’s worth remembering that moving to a cheaper property could be an alternative to equity release.


Another way of raising funds from your property could be to take in a lodger. This does not generally appeal to customers due to the invasion of privacy that it brings. However, it may be worth considering.


By releasing funds in your lifetime that would otherwise stay tied up in your home until you die, an equity release plan may reduce the size of your estate. As a result it will reduce the amount that you would be able to pass on to any beneficiaries.


It’s possible that the extra funds made available to you by equity release could affect your entitlement to any means-tested state benefits, which you may receive now or in the future.

A step by step guide to releasing equity.

If you’re wanting to take action with equity release, but are unsure on how the potential risks may affect you and your unique situation, just contact us today to book your no obligation meeting where we would be more than happy to provide you with an illustration.