If you want to access some of your property wealth to boost your retirement income, equity release has helped millions of homeowners to do just that.
You will initially choose between a lifetime mortgage and a home reversion plan. Both of these allow you to unlock some of the tax-free money tied up in the value of your home to spend in almost any way you wish. If you have a mortgage or other secured loans when you apply for a plan, you must pay these off with some of the money you unlock.
Your equity release plan typically comes to an end when you pass away or move into long-term care, at which point your home is put up for sale to settle your plan. Any money left over from the sale of your home is then paid to you or your estate.
Lifetime mortgages are a form of loan available to over-55s and are the most common form of equity release. You continue to own 100% of your home and have no mandatory monthly repayments to make as the interest is added to your loan amount each month. You can reduce or prevent the interest that accrues by making voluntary payments or by arranging an interest-only equity release plan.
Home reversion plans are available to over-60s. They involve selling all or some of your home in exchange for a tax-free cash lump sum. The amount you receive will be less than the market value of your home and you will continue to live there for the rest of your life as a tenant, but paying no rent.
Of course, there are pitfalls to equity release which you should consider, including how a plan will reduce the value of your estate and the amount of inheritance you leave.
If you speak to our selected advisers, they can answer all your questions and search for the best plan for your needs. They’ll also check if one of the alternatives to equity release could be a better financial option to ensure you are making the right choice for your needs.
Want to know how much you could unlock from your home? Check your eligibility and get your free quote now!