equity release
Equity Release Hub
Looking to access the value tied up in your home?
Whether you are looking into equity release, lifetime mortgages, or RIO mortgages, our guides and articles will cut through the jargon so you can more easily understand your options.
You’ve worked hard to build value in your home over the years.
Equity release is a way to access some of that value without having to move. This could give you the extra funds you need to enjoy your retirement, improve your home, help out family, or reach other important goals.
We know that choosing how to access the value in your home is a big decision.
We’ve created various guides to help you understand equity release and other options you might have. Our goal is to give you a clearer picture of your choices so you can feel confident about taking the next step.
Please Note: The content on this page is designed to be a helpful starting point for understanding equity release. It explores the concept, different plan types, and the general process involved. However, equity release is a complex financial decision with significant implications for your long-term financial security. To determine if equity release is the right option for you, it’s essential to consult with a qualified financial adviser who specialises in equity release products.
Unlocking Equity: What Equity Release Is and How It Works
At its core, equity release is a way for homeowners aged 55 and over to access some of the value they’ve built up in their property over the years.
Think of it like a loan secured against your home.
Instead of selling and moving, you can receive a tax-free cash sum or regular income payments. This provides you with financial flexibility without the need to give up ownership of your home.
There are two main types of equity release plans:
Lifetime Mortgages
This is the most common option. You receive a lump sum of cash or opt for regular income payments.
While you don’t have to make monthly repayments, interest is added to the loan over time. The outstanding balance of the loan, including the interest, is repaid from the eventual sale of your home when you pass away or move into long-term care.
Key Points to Remember
- You don’t normally have to make any monthly repayments with equity release plans.
- Releasing equity will reduce the value of your estate, potentially impacting any inheritance you wish to leave.
- Seeking professional financial advice is absolutely essential before deciding on equity release.
Equity release mortgages
Let us explain the basics of equity release, including how it works and how much you could borrow.
Guide to equity release
Our guide to unlocking the cash from your home using an equity release plan.
What is Equity Release?
If you’re a homeowner aged 55 or over, equity release could be the key to unlocking the value tied up in your home without having to sell.
Discover how it works and if it’s the right financial solution for you.
How Does Equity Release Work?
Wondering how to access the cash tied up in your home without having to sell? Equity release might be the answer you’re looking for.
Let us explain how it works.
What is a home reversion plan?
If you’re a homeowner looking to unlock some of the money tied up in your property, a home reversion plan might seem appealing.
But how does it work?
What is a lifetime mortgage?
Wondering how to access the cash tied up in your home without having to sell? A lifetime mortgage might be the answer you’re looking for.
Am I Eligible for Equity Release?
Wondering if you could unlock some of the cash tied up in your home through equity release?
We explain the basic requirements for equity release in the UK.
Equity Release & Joint Ownership
Accessing equity from a jointly owned property should be pretty straightforward. Learn how equity release works when you own your home with someone else.
How is equity release paid back?
Many people wonder how equity release is paid back and whether they can voluntarily make repayments.
Read on as we explain how equity release is paid back.
Things to Consider
Thinking about equity release?
Equity release can be a great way to access extra money – but is it right for you?
Benefits of Equity Release
Equity release offers more than just a financial solution. Explore the many benefits it offers, from increased financial freedom to the ability to live life on your own terms.
What’s the difference between a remortgage and equity release?
Both of them are mortgages but they work in very different ways.
Access some of your home’s value using equity release
See how equity release can allow homeowners to utilise their home’s equity.
Can you afford to help bankroll your children’s property purchase?
The Bank of Mum and Dad is becoming ever more important for first time buyers.
How does equity release work when you die?
We explain how equity release is typically handled on death plus important considerations for your family.
Can you do equity release more than once?
Is it possible to take out another plan and release more equity? Read on as we will answer both of these questions and more.
Not directly.
Equity release providers mainly focus on the value of your home and your age, not your credit history. However, existing debts might need to be repaid as part of the process, potentially reducing the amount you can borrow.
Equity release proceeds are tax-free and usually don’t directly impact your state pension entitlement.
However, receiving a large lump sum could affect eligibility for other means-tested benefits. Always consult with a financial adviser to understand the potential implications for your specific situation.
Yes.
Both refer to financial products that allow older homeowners to access their home equity without having to move.
The term ‘reverse mortgage’ is mainly used in the USA, Canada and Australia.
In the UK we call them equity release.
Equity release plans in the UK are strictly regulated by the Financial Conduct Authority (FCA) and often adhere to additional standards set by the Equity Release Council (ERC).
These protections include independent legal advice and the “no-negative equity guarantee.”
The better choice depends entirely on your priorities.
Equity release lets you stay in your current home but reduces inheritance for your loved ones. Downsizing can free up cash and potentially lower housing costs, but means moving to a new home.
The older you are, the more equity you could potentially release. This is because lenders consider your age when calculating how much you can borrow.
Yes, the FCA regulates all equity release providers in the UK.
This ensures they operate with transparency, fairness, and consumer protection in mind. Always look for providers who are FCA authorised and consider those who are also members of the Equity Release Council.
No, while both allow you to access home equity, they work very differently.
Equity release is an umbrella term that includes lifetime mortgages and home reversion plans. With home reversion, you sell a portion of your home’s ownership for cash. Lifetime mortgages are mortgages, and you retain full ownership of your home.
There’s no official upper age limit, but individual providers will have their own maximum age requirements.
Some plans might be available for those into their 90s or older, depending on the provider and the applicant’s circumstances.
Equity release can be beneficial for accessing cash to improve your retirement lifestyle or meet financial needs without selling your home.
However, it reduces the inheritance you leave behind and comes with accumulating interest that can erode your home’s value over time.
Carefully consider your future needs and seek professional financial advice to determine if it’s the right decision for you.
Possibly.
Although equity release products don’t require any affordability assessments, the lenders do carry out a standard credit search.
Having a poor credit score or missed payments won’t generally go against you.
But more formal debt arrangements, like CCJs, will normally need settling. These can include:
- Mortgages
- Secured Loans
- Charging Orders
- Outstanding County Court Judgements (CCJ’s)
- Individual Voluntary Arrangements (IVA’s)
Yes. Even if you meet the basic age and property requirements, providers consider several factors when approving an application. Reasons for denial might include:
- Insufficient home value
- Specific property types that are not accepted
- Health conditions that don’t meet enhanced plan criteria
- Poor credit history in some cases
Yes. Lenders need you to pay off any outstanding mortgage on the property with the equity release funds.
Other debts could be repaid by using the lifetime mortgage for debt consolidation purposes.
Selling a house with equity release is possible, whether you have a lifetime mortgage or home reversion plan. The situation with a lifetime mortgage is more straightforward as it’s basically a mortgage. You will need to pay off the amount you owe and there’s likely to be some early repayment charges.
Yes, lifetime mortgages are a type of equity release.
Equity release is a broader term encompassing two main options for homeowners aged 55 or over to access the cash tied up in their property’s value without selling:
Lifetime mortgages: These are the most common form of equity release.
You borrow money secured against your home, often with no required monthly payments. The interest rolls up into the loan, increasing the total amount owed over time. The loan is repaid, along with accrued interest, when you pass away or move into long-term care, usually through the sale of your home.
With this option, you sell a portion of your home’s ownership (usually between 20-60%) to a home reversion company for a lump sum or an income stream.
You retain the right to live in your property rent-free for life, but the ownership stake you sell reduces the potential inheritance for your loved ones.
Yes, you can potentially get equity release on a Grade 2 listed building.
While some lenders might have stricter requirements, several providers specialise in offering plans for listed properties.
Lenders need to ensure your home can be sold easily to repay the loan in the future. Listed buildings have specific upkeep requirements and a potentially smaller buyer pool.
Eligibility criteria differ among providers. Grade 2 listed buildings are more likely to be accepted compared to Grade I or Grade II* properties.
Lifetime Mortgage:
Yes, you retain full ownership of your property with a lifetime mortgage.
It’s like a loan secured against your home. You don’t typically make monthly repayments, but the interest is rolled up into the loan balance. The loan is repaid along with accrued interest when you pass away or move into long-term care, usually through the sale of your home.
Home Reversion Plan:
No, you partially sell ownership with a home reversion plan.
You sell a portion of your home’s ownership (usually between 20-100%) to a home reversion company in exchange for a lump sum or an income stream. While you retain the right to live in your property rent-free for life, the ownership stake you sell reduces the potential inheritance for your family.
There’s no set upper age limit. There are age limits when applying for equity release but a large number of lenders accept borrowers aged 90.
Once your plan is approved, it can continue for the rest of your life, providing flexibility and security for as long as needed.
Do you have to pay tax on equity release?
It’s a fair question as the average lump sum taken is around £80,000, according to the Equity Release Council.
Can equity release be transferred to another property?
You want to move home but can you take your lifetime mortgage with you?
Can you get equity release if you still have a mortgage?
Many people considering equity release wonder, “Can I still get it if I have a mortgage on my house?” The good news is, the answer is often yes!
What can you use equity release for?
What do people spend their money on? And are there things that you can’t do with equity release cash?
What is drawdown equity release?
Drawdown equity release allows you to take ad-hoc or regular withdrawals.
Do you need a solicitor for equity release?
This short guide focuses on whether you need your own solicitor when applying for an equity release plan.
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