A plan that fits your needs
EQUITY release has evolved in recent years. It has become increasingly flexible with a wide choice of plans tailored to fit your requirements. Here are the main options, in order of popularity.
A LIFETIME mortgage is a form of equity release plan where a loan is secured against your property to provide you with a tax-free cash lump sum to spend as you wish, with typically no monthly repayments to meet. Compound interest is added to the lifetime mortgage until the plan comes to an end. The loan plus interest is eventually paid back when the home is sold, usually when you move into long-term care, or when you and your partner die. You can typically release between 5 and 55.5 per cent of the value of your property with a lifetime mortgage, depending on your age, health and lifestyle.
DRAWDOWN lifetime mortgages work in the same way as lump sum lifetime mortgages but with added flexibility. Once you know the maximum amount of money you can access, after an initial release amount you can then choose to draw down the cash in stages as and when you want to. The interest is only added on the amount released so it adds up more slowly than it would if you released the full amount at the outset. These drawdown plans provide a flexible option and can form an essential part of planning your future finances.
A HOME reversion policy allows you to sell part or all of your home to a reversion plan company in exchange for a tax-free cash lump sum, with no monthly repayments to make. You have the absolute right to stay in your home rent-free. Both you and the company share in any increase in your property provided you have not sold all its value. And you can guarantee an inheritance. When the plan comes to an end, the provider takes its percentage share of sale proceeds.