Equity Release Solutions

The two main types of Equity Release

There are two primary forms of equity release in the UK:

Lifetime Mortgages are the most popular option. You take out a loan secured against your home while retaining ownership. You don’t typically make monthly repayments—instead, the interest rolls up over time. The loan, plus accumulated interest, is repaid when you pass away or move into long-term care, usually through the sale of your property.

Home Reversion Plans work differently. You sell part or all of your home to a provider in exchange for a lump sum or regular payments, but you continue living there rent-free. When the property is eventually sold, the provider receives their share of the proceeds based on the portion they own.

Is It Right for You?

Equity release can be helpful if you need extra income in retirement, want to help family members financially, or have large expenses to cover. However, it’s not without considerations. The amount you can leave as inheritance will be reduced, and with lifetime mortgages, the interest can compound significantly over time.

Before making any decisions, it’s essential to speak with a qualified financial advisor who can assess your individual circumstances. Look for providers who are members of the Equity Release Council, which ensures important protections like the guarantee that you’ll never owe more than your home is worth.

Your home represents years of memories and financial security. Understanding all your options ensures you make the choice that’s truly right for your future.

Frequently Asked Questions?

Top 10 Equity Release FAQs

1. What is equity release? Equity release allows you to access the wealth in your property without selling it and moving Gw. You can borrow against your home’s value or sell part of it in exchange for either a lump sum or regular income.

2. What are the two main types of equity release? The two main types are lifetime mortgages and home reversion plans Equityreleasesupermarket. Lifetime mortgages account for over 99% of all plans and work like a regular mortgage but with no fixed term. Home reversion involves selling part or all of your property in exchange for cash.

3. What are the age and property requirements? For lifetime mortgages, you must be at least 55 years old, and for home reversion plans, at least 65 Equityreleasesupermarket. Your property must be worth at least £70,000 Equityreleasewarehouse, and you need to be living in the UK.

4. Is the money I receive taxable? The money you receive is tax-free since it’s a release of capital from your home Compareequityrelease. However, if you place the money in savings or investments, any interest or gains could become taxable.

5. Can I release equity if I still have a mortgage? Yes, but you’ll need to pay off your existing mortgage and any early repayment charges with the money you release Legal & General.

6. Do I have to make repayments? You don’t have to repay anything until your plan ends and your property is sold, or you choose to repay the loan Gw. Many modern lifetime mortgages now allow optional repayments if you wish to control the future balance.

7. Can I move house with equity release? Yes, you can move house by transferring your lifetime mortgage to your new property, which is known as ‘porting’ Compareequityrelease. This is subject to the new property meeting the lender’s criteria, though you’ll typically pay valuation and legal fees.

8. Will equity release affect my inheritance? Yes, equity release will likely reduce the amount you can leave to beneficiaries since the loan plus interest must be repaid from the sale of your home. However, some plans allow you to protect a portion of your property’s value for inheritance purposes.

9. Will it affect my benefits? Potentially yes – if you receive any benefit payments, you should check with the relevant benefits agency whether taking out equity release could affect your entitlement Equityreleasecouncil before starting the application process.

10. What is the No Negative Equity Guarantee? All Equity Release Council members must offer this guarantee, which ensures you’ll never owe more than your home is worth. Even if the loan and interest exceed your property’s value when it’s sold, neither you nor your estate will have to pay the difference.