Equity release
Could now be the time to draw money from your home?
The recent growth in demand for equity release has brought an increased focus on this retirement finance product.
According to the Equity Release Council, the body that represents the UK equity release sector, there were 35,501 equity release loans taken out in the first half of 2020. Although the market saw a reduction during March and April, the number of loans arranged has still grown by 14% over the past three years1.
Great news for you
All of this demand from homeowners looking to access tax-free money from their homes is great news for consumers such as you. It has brought with it a surge in new products from many lenders, alongside a substantial drop in equity release interest rates, which means increasingly flexible plans, which cost you less.
So how does equity release work?
The money that you release is tax-free and you can choose to access it as a lump sum or as smaller amounts over time – whichever works best for you. What’s more you can spend the money you release on almost anything you wish to once you have paid off any existing standard mortgage that you may have, from planning the holiday of a lifetime to those long-dreamt-of home improvements, to name but a few.
How do you qualify?
In order to release equity, the youngest homeowner must be at least 55 years of age and your home must be worth at least £70,000. With a lifetime mortgage, the most common type of equity release, you could release from £10,000 up to 55% of the property value and you continue to own 100 per cent of your home.
Your next step – get advice
An independent equity release advisor will explore all options with you, and will tell you everything you need to know about equity release, including the effect on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected now or in the future.
The UK's largest equity release broker2, Age Partnership, provide a free equity release quotation outlining what equity release could mean for you. You’re under no obligation to proceed with anything that is recommended to you.
Only if you choose to proceed and your case completes would a typical fee of 2.25% of the amount released be payable (minimum £1,695).
What's involved?
Although there are no monthly repayments required with equity release, any money released, plus accrued interest, would be repaid upon death or moving into long-term care. Equity release may involve a home reversion or a lifetime mortgage which is secured against your property.