10 need-to-know things about equity release

1

You do not have to make monthly repayments, the interest and capital are repaid from the final sale proceeds of your home. Some plans do allow you to pay off the interest, to slow the speed at which your debt rolls up.

2

You can stay in your home as long as you wish with any plan approved by the Equity Release Council (ERC).

With most schemes you are free to move home and transfer the plan to your new property, provided you meet lending criteria.

How much you will receive depends on factors such as your age, property value, health and lifestyle, and the plan.

5

Popular drawdown plans allow you to take the money in stages rather than as a single lump sum, with the benefit that you only pay interest on the money you have taken.

6

All Erc-approved plans have a no-negative equity guarantee, so you and your family will never owe more than your home is worth. 7

Future increases in your home’s value may give you an opportunity to release more equity, while a drop may restrict what you can borrow in future.

8

Equity release will reduce the inheritance you leave. Some plans let you pass on a fixed percentage of your home’s value. 9

You can use equity release as a “living inheritance”, passing money to loved ones while still alive while potentially reducing a future inheritance tax bill.

10

Cash you release from your main home is free of tax but may hit your entitlement to means-tested benefits.