WHAT ARE THE DIFFERENT TYPES?

There are two main types of equity release:

1

A lifetime mortgage is a type of loan that is secured against your home. It allows you to access some of the cash that is tied up in your home, tax-free, while still being able to live there.

With most lifetime mortgages, there are normally no regular repayments to make and nothing usually has to be repaid until the last borrower dies or moves into permanent long-term care.

2

A home reversion plan provides you with a tax-free cash lump sum in exchange for selling all or part of your home to a home reversion company. It is important to note that you will receive less than the market value for the share you sell.

You can stay in your home for the rest of your life until you die or move into long-term care.

Equity release isn’t right for everyone and it will reduce the value of your estate, so it is vital to gain expert advice.

Retired Mr Morgan released tax-free cash tied up in the value of his home using equity release, providing himself and his wife with the money needed to improve their home and buy a new car. And they still have a little bit of cash left over for a rainy day.

“I originally saw an advert in the paper and it was the solution we needed. We were at a point that we wanted to get a bit more work done on the house – the soffits and guttering and that. Equity release has helped us achieve this and the work is all done and paid for.” says Mr Morgan from Gloucestershire. Equity release also allowed Mr and Mrs Morgan to do more than just home improvements. “We’ve changed the car. The other one was getting really old and wasn’t worth spending any more money on. I’ve gone for the same brand again – I always do.”