Your complete guide to Halifax equity release

Everything you need to know about Halifax equity release

Written in line with our editorial policy.

It may seem simple, but understanding what’s happening with Halifax equity release needs a little detective work. So sit back, and we’ll tell you everything you need to know about Halifax equity release.

In this guide, you’ll find information on the following:

• About Halifax
• Does Halifax currently offer equity release?
• What happened to Halifax equity release plans?
• Which equity release plan does Halifax recommend?
• How does Halifax’s recommendation compare to other alternatives?
• How can I easily find out what other equity release providers offer?

About Halifax

Halifax is one of the most established names in UK personal finance. It’s been a bank since 1997, but traces its roots as a building society all the way back to 1852. Thousands of people either bank with Halifax or have a Halifax mortgage. Given Halifax’s heritage and reputation, it’s natural that homeowners aged over 55 may look to the company for equity release. 

Despite its established position, Halifax often gets bad reviews on Trustpilot and Review Centre. However, these reviews often cover banking rather than specialist areas such as mortgages and equity release. Halifax is often praised for its mortgage business and won ‘Best Overall Lender in the Which Mortgage Awards 2021. 

Does Halifax currently offer equity release?

The simple answer to this question is no, you can no longer take out a Halifax equity release plan. You may be surprised that one of the UK’s biggest lenders doesn’t offer equity release. Halifax isn’t alone in this, however. Companies known for their traditional mortgages tend not to be in the equity release market. 

Equity release is mostly available from companies better known for their insurance products. These include Aviva, LV=, Legal & General and Canada Life. There are also specialist retirement income providers like Just and Pure Retirement, so the market hasn’t been greatly affected by the withdrawal of Halifax. Release equity from any of these providers and you will have a range of welcome product options to choose from.

What happened to Halifax equity release plans?

The company did previously offer a product considered to be a form of equity release. Halifax called it the Retirement Home Plan. According to the Financial Times and Money Marketing, it was a type of interest-only lifetime mortgage for people aged over 65. 

The company pulled the plan from the market in 2011, marking the end of their time as a provider of equity release. Halifax was at that time one of just two companies offering this type of equity release. Thankfully, interest-only lifetime mortgage products are now more common and a number of equity release providers offer them.

An interest-only plan may be attractive if you would like to make voluntary monthly interest payments. If you pay the full interest each month, the amount owed won’t increase over time. This is unlike standard lifetime mortgages where lenders add the interest to the loan.

Read more: The Equity Release Wise guide to interest-only lifetime mortgages

Which equity release plan does Halifax recommend?

That could be the end of the story: you can no longer take out a Halifax equity release scheme. However, things aren’t quite that simple, because Halifax points its customers towards Scottish Widows as an equity release provider. 

It’s perhaps not surprising that Scottish Widows in effect replaced Halifax equity release. Both companies are part of Lloyds Banking Group, which also includes Bank of Scotland. Halifax joined the group in January 2009, and by then Scottish Widows was already part of it. In 2011 July 2009, the equity release Halifax offered was withdrawn from the market. 

Scottish Widows offers lifetime mortgages to homeowners aged 55 or over. Their plan is what’s known as a drawdown lifetime mortgage. With this type of plan, you release an initial lump sum, followed by more instalments over time. This guide to drawdown lifetime mortgages provides more information about this type of plan. You can of course talk to one of our selected advisers for help and information by calling 0808 178 3055 or request a call back.

How does Halifax’s recommendation compare to other alternatives?

Perhaps the most attractive thing about the Scottish Widows plan is its drawdown facility. It also brings you important features offered by every other member of the industry trade body, the Equity Release Council:

• A ‘no negative equity guarantee’ that means you or your estate will never owe more than your property is worth. 
• The right to ‘port’ (move) your lifetime mortgage to another property subject to terms and conditions. 

In addition, Scottish Widows offer an inheritance protection option. This means that some of the property value can be ring fenced to guarantee an inheritance when the borrower passes away. Alternatively, this protection can ensure funds are available to the borrower when they move into long-term care.

But some important aspects of the Scottish Widows plan aren’t as flexible or comprehensive as those offered by other providers:

• Interest payments: There is no possibility of making monthly interest payments, which was a feature of the equity release Halifax offered.
• Minimum release amount: With Scottish Widows, you must release at least £30,000. If you want to release less than this, you must look elsewhere for your lifetime mortgage. For example, with equity release from Just, the minimum release is just £10,000. 
• Minimum property value: Scottish Widows’ criteria state that your home must have a minimum value of £100,000. (£150,000 for ex-local authority, ex-housing association and ex-Ministry of Defence properties.) Some lenders have different criteria. For example, with More2Life equity release the criteria is a minimum of £70,000, or £100,000 for ex-local authority houses.
• Main residence: With Scottish Widows, the property must be your main residence. Some lenders offer second home lifetime mortgage plans or buy-to-let lifetime mortgages.

How can I easily find out what other equity release providers offer?

This has been just a brief comparison of Scottish Widows’ lifetime mortgage with products from other providers. We recommend getting information about products and quotes from multiple providers. This is how you can make sure you find a suitable plan with the most competitive terms. 

Halifax equity release may be a thing of the past, but thankfully there are plenty of other reputable providers to turn to. It would of course be very time consuming to try to compare the hundreds of equity release plans on the market yourself.

Thankfully, all it takes is a call to Equity Release Wise on 0808 178 3055 or request a call back and one of our friendly equity release consultants will be happy to answer any questions. They can also arrange an appointment with one of our selected advisers for advice and quotes from leading providers.