Caution is needed over equity release schemes

EQUITY release schemes (also known as lifetime mortgages) offer older home owners security and a source of funds with which to enjoy their retirement.

So much so that the over-55s withdrew a total of £824million via equity release in the last quarter, from July-September 2017. This represents a rise of 34 per cent (in the number of plans agreed) since the same period last year – figures which we report today that come from the Equity Release Council.

It is understandable that these arrangements are so popular; it is similar to taking out a mortgage without having to make monthly repayments. The lump sum only has to be repaid after the person’s death or when the house is sold.

With property prices high many homeowners find themselves living in homes that are substantial, untapped assets. These schemes can be a wonderful way of paying for necessities and some of life’s pleasures.

However, the interest rates can be steep. Many financial experts therefore advise that equity release should only be considered as a last resort. Take advice before you act. After all, most of us only have one home.