Equity Release

Equity release is a way of accessing some of the value built up in your home while continuing to live there.

Your equity is the difference between the current value of your property and any mortgage or other borrowing secured against it. For example, if your home is worth £300,000 and you have an outstanding mortgage of £50,000, you have approximately £250,000 of equity.

The most common form of equity release is a lifetime mortgage. This is a loan secured against your home that is usually repaid when the last borrower dies or moves permanently into long-term care.

Unlike a standard residential mortgage, you will not necessarily be required to make monthly repayments. However, interest will be charged and can be added to the loan, meaning the amount owed may increase considerably over time.

The amount you can release will depend on factors such as:

• Your age
• The age of the youngest applicant
• The value of your property
• The property’s location and construction
• The condition of the property
• The amount of any existing mortgage
• The type of equity release plan selected
• Your health and lifestyle, where enhanced terms are available

You can normally choose to receive the money as a single lump sum, through a drawdown facility or as a combination of both.

Any existing mortgage or other borrowing secured against your home will usually need to be repaid when the equity release plan completes. This can be paid using the money released, although doing so will reduce the amount remaining for other purposes.

A lifetime mortgage is a loan secured against your home. You retain ownership of the property and can normally remain there for the rest of your life, provided you comply with the terms of the mortgage.

The loan and any accumulated interest are usually repaid from the proceeds when your property is sold following the death of the last borrower or their permanent move into long-term care.

Depending on the plan, you may be able to:

• Make no monthly payments
• Pay some or all of the monthly interest
• Make voluntary repayments
• Protect a percentage of your property’s value for inheritance
• Take an initial lump sum
• Use a drawdown facility for future withdrawals

The features available vary between lenders and products.

Equity release is a specialist area of mortgage advice. Our advisers can:

• Review your objectives and financial circumstances
• Assess your current and future income needs
• Consider your health and lifestyle
• Check how releasing money could affect your benefits
• Discuss the impact on your estate and inheritance
• Explore alternatives to equity release
• Compare suitable lifetime mortgages from available lenders
• Explain interest, charges and repayment options
• Provide a personalised recommendation
• Work with your solicitor throughout the application

We will only recommend equity release where we believe it is suitable for your needs and circumstances.