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Plans > Home Reversion
Sell all or part of your home to receive tax-free cash, with the right to remain there rent-free
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Home reversion is a type of equity release plan that enables you to sell all or part of your home in exchange for a tax-free cash lump sum or income. You can then remain in your home rent-free for the rest of your life or until you move into long-term care.
If your income is limited but you have money tied up in your property, this could be a good way to enjoy a more comfortable lifestyle without having to downsize.
Available to homeowners aged 60+, home reversion plans allow you to use the money you release in any way you choose. You may wish to gift some of your property wealth to your loved ones now, for example, to help them on to the property ladder. Or perhaps you’ve been dreaming of a once-in-a-lifetime holiday, a new car or a beautiful extension to your home?
To find out how much you could borrow, check here, speak with our friendly consultants on 0808 178 3055 or request a call back.
Another, much more common form of equity release may be a more suitable alternative to home reversion. A lifetime mortgage is a type of equity release for over 55s where you release tax-free cash in the form of a loan secured against your property. You normally make no monthly payments on the loan: instead, the loan is repaid through the sale of the property when you pass away or move into long-term care.
With a home reversion plan, you are given a ‘lifetime lease’ that guarantees you the right to stay in your home rent-free for the rest of your life, subject to terms and conditions. This is the case whether you sell all of your property to a home reversion provider, or a proportion of it.
Home reversion allows you to release tax-free funds from your property, in the form of a lump sum, regular income, or a combination of both. There is no rent, loan repayments or interest to pay.
A home reversion scheme doesn’t require you to leave the property. In fact, you can continue to live there as a tenant rent-free until you pass away or move into long-term care. If you’d prefer not to downsize or move to a less expensive area, home reversion could be a better option than leaving the home you love to raise cash. However, home reversion plans are portable, so you would potentially have the option of moving in the future if you wish.
If you choose to sell a percentage of your home to the home reversion company, rather than all of it, you can leave your remaining share to your family. This means you will be guaranteeing them an inheritance, with their proceeds from the sale of the property depending on its future market value.
The amount of cash you can release depends upon factors including your age, health, lifestyle and the value and condition of your property. It’s important to remember that the money you receive will be much lower than its current market value. Home reversion providers typically pay 30–60% of the current market rate. The older you are, the higher the percentage of your home’s market value you’re likely to be offered.
Lenders offer less than the market value because you will be living in the home rent-free, possibly for many years. Also, unlike other types of equity release, the lender will not receive any loan interest for the tax-free cash they pay out to you. They also do not know exactly when they will get their money back, and face the uncertainty of future house prices.
Home reversion isn’t for everyone, and the majority of equity release is done through another type of plan called a lifetime mortgage. But home reversion plans are suitable for some people, and may enable you to raise a larger sum from your home than with a lifetime mortgage.
With such an important decision, it’s crucial to get the right advice. Our expert team of selected advisers can help you understand all of the benefits and risks and find out whether home reversion may be suitable for you. Call us on 0808 178 3055 or request a call back.
Each home reversion provider will have their own eligibility criteria, but the following are likely to apply:
Generally, home reversion plans are best for older people, specifically those aged 70 or above. This is because the older you are, the higher the percentage of your home’s market value you’re likely to receive.
Call us on 0808 178 3055 and we’ll arrange a free, no-obligation appointment and home reversion advice* from a specialist who will confirm whether you are eligible. If you’re unable to talk now, request a call back and we’ll call when it’s convenient to you.
If you’re looking into home reversion for the first time, it might be useful to look at an illustrative example. A 70-year-old couple want to stay in the home they love but need to generate additional retirement income. They find that home reversion works for them, maximising the amount of cash they can access.
It also gives them the option of guaranteeing an inheritance for their loved ones. They do this by selling 75% of their home to a home reversion provider in exchange for a cash lump sum. The company retains 75% of the final selling price, but the couple’s family would receive the remaining 25% when the house is sold, based on the market value at that time.
Equity Release Wise can save you time by arranging a comparison from leading home reversion providers to make sure you access the best solution. As part of the service, your adviser can also review other forms of equity release (lifetime mortgages) to make sure you choose the best plan for your circumstances. All of the equity release providers we work with are authorised and regulated by the Financial Conduct Authority and are members of the Equity Release Council.
Find out if you qualify for equity release and how much you could borrow. Just click ‘Get started’ or call us on 0808 178 3055 and one of our team will be delighted to help arrange a free consultation and quote*.
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Still unsure of a few things? We’ve got you covered with answers to some of our most frequently asked questions.
When looking at a lifetime mortgage vs home reversion, they are both forms of equity release but a major difference is that with a home reversion plan, you no longer own all of the property.
A lifetime mortgage is a loan secured against your property and you retain full legal ownership of it. The loan and the interest are repaid when the property is sold when you pass away or move into long-term care.
A home reversion plan (also known as a reverse mortgage) does not require you to borrow against the value of your property, therefore there is no interest to pay. Instead, a home reversion plan involves selling all or a percentage of your home to a home reversion provider.
Both of these equity release products can help your finances by providing you with a tax-free lump sum, future payments, or both. You’re also free to remain in your home for the rest of your life with both a home reversion and a lifetime mortgage.
While home reversion used to be a popular equity release product, now only a relatively small number of plans are sold. Even so, it could be a suitable equity release option depending on your circumstances.
Home reversion plans are regulated by the Financial Conduct Authority (FCA). All products offered by home reversion providers must meet certain standards in line with the FCA Handbook.
The Equity Release Council is a voluntary body which ensures all of its members act with integrity and transparency when offering equity release products and services to consumers. All the equity release advisers you connect with through Equity Release Wise are members of the Equity Release Council.
Any initial advice or information you receive from our selected advisers is completely free and without obligation. Only if you choose to proceed and your case completes will you pay an advice fee. Other costs you may need to consider are:
You will be made aware of all fees by your equity release adviser before you agree to take out a home reversion plan.
Also, when you take out a home reversion plan, you’ll still be responsible for covering costs for the maintenance of the property so that it remains in a saleable condition.
Yes, home reversion plans and other forms of equity release are available across every country in the UK. When you contact Equity Release Wise, we will connect you with our carefully selected advisers who can help you find the best plan for your circumstances.
Home reversion schemes are very specialised products and are not for everyone, so it’s vital you seek the advice of a specialist before agreeing on a plan. The great news is that Equity Release Wise can connect you with a highly trained and knowledgeable adviser who will take the time to explain everything to you, so you can be absolutely sure about your decision.
During your appointment, your adviser will discuss the following drawbacks of a home reversion plan with you:
Other forms of equity release may be more suitable for you than a home reversion plan. Read about these below, or talk about your options with one of our selected advisers so that you can find the best solution for you:
Lump sum lifetime mortgage
Access a tax-free cash lump sum if you’re a homeowner aged 55 or over. You retain full ownership and can stay at home until you pass away or move into long-term care.
Drawdown lifetime mortgage
Instead of making a one-off cash withdrawal, you take an initial cash sum and additional funds as and when you need them. This helps to reduce the total interest you pay.
Interest-only lifetime mortgage
A more cost-effective method of equity release where you make voluntary interest payments to reduce or prevent compound interest building up.
Enhanced lifetime mortgage
Certain health conditions or lifestyle factors could qualify you for higher cash releases or lower interest rates. A simple questionnaire is all that’s needed to check eligibility.
Second home lifetime mortgage
If you have a second home you may be able to secure a lifetime mortgage against it, or make your dream of a second home come true with a release from your main residence.
Buy-to-let lifetime mortgage
These specialist plans could enable you to release equity from a buy-to-let property, or to use the wealth in your home to help you make a buy-to-let investment.
We hope this information has been useful. To find out more or arrange a consultation with an adviser, please call or request a call back and we’ll be happy to help further.
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Request a call back+ Client testimonials refer to the service provided by our selected equity release advisers. We have changed the clients’ names and certain identifying information to protect their privacy.
Please note that equity release will involve a home reversion or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care. To fully 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.
