What is equity release and could it be right for you?

To put it simply, equity release is a way to unlock some of the cash (equity) in your property while you still carry on living in and enjoying your home.

For most of us, our homes are our most valuable asset. If you've owned your home for a number of years it’s likely to have increased in value and could mean you are sitting on a chunk of equity. The money that you release is tax-free and you can choose not to make monthly repayments if you'd prefer not to. This in turn can free up more disposable income each month.

How much money can I access?

The amount of money that you can release is determined by the age of the youngest homeowner and the value of your home. Certain health conditions can mean that you could access even more money, this is something that an adviser would discuss with you.

You can access the money that you release as a lump sum, or as smaller amounts over time - whichever works best for you.

As you don't have to make repayments, the money that you release, plus accrued interest would be repaid upon death, or moving into long-term care.

How do I know if I’m eligible?

There are three main stipulations that you should meet in order to qualify for equity release.

You must be aged 55 or over

You should own your own home

Your home must be worth at least £70,000.

What does it involve?

Equity release may involve a home reversion plan, or a lifetime mortgage which is secured against your property.

A lifetime mortgage is the most popular form of equity release and with this option you continue to own 100 per cent of your home.

As equity release is a specialist financial solution you should seek independent financial advice. To understand the features and risks, ask for a personalised illustration. Equity release requires paying off any existing mortgage.