What is equity release?
An equity release plan allows homeowners who are 55+ to unlock some of the tax-free cash from your home.
There are two main types of equity release plan: lifetime mortgages and home reversion plans. Lifetime mortgages are more popular and most of the equity release plans taken out in the UK are of this type.
There are typically no monthly repayments to make with a lifetime mortgage as the loan plus interest is only repaid when you pass away or move into long-term care. At this point your home will be sold to settle the loan.
There are further choices and features which enable you to tailor your plan. These include:
- Enhanced lifetime mortgage. If you have a qualifying health condition then you may be able to unlock more cash or lower interest rates.
- Interest-only lifetime mortgage. These let you prevent or reduce interest from accruing on your loan by paying off some or all of the interest each month.
- Drawdown lifetime mortgage. Release some cash now, then access further funds in the future as and when you want to. This can save you a significant amount of interest over time.
Home reversion plans, on the other hand, involve you selling all or part of your home to a reversion company in exchange for a tax-free cash lump sum. You then live in your home as a tenant but without paying any rent.
Not 55 or over yet? You may still be able to access some of your equity. Read our blog to explore how to release equity if you are under 55.
If you’d like to explore your options for equity release, simply call us on 0800 096 2215 or request a call back for a time that suits you, and we’ll arrange an appointment with one of our selected advisers. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.