Everything you need to know about Equity Release

If you’re looking to release equity from your property, want to know if your eligible to do so or are simply looking for more information about how Equity Release works and how to get one, you’re in the right place.

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Releasing Equity in your property can appear a minefield and the market has previously suffered from a bad reputation. However, that has all now changed.

What Is Equity Release?

Equity Release allows you to release some of the cash tied up in your property without having to move or downsize. The money you release is tax-free and can be spent however you wish. Please be aware that releasing equity from your property will reduce any inheritance in respect of your loved ones and could influence any means-tested state benefits now and in the future.

How Much Can I Release?

The amount that you can release depends on your age and value of your property. However, some lenders will also consider your health and lifestyle. You can choose if you want to release the cash as a lump sum all at once or chose to take your money in regular small amounts. To find out exactly how much, fill in our enquiry form and an specialist adviser will be in touch to provide a no obligation quote.

What products are Equity Release?

There are several products that fall under the umbrella term of ‘equity release’, specifically, this includes lifetime mortgages, home reversion plans and regulated sale and rent back agreements. These products have different advantages and disadvantages depending on your needs and circumstance. We work with third parties that can provide advice in relation to lifetime mortgages / home reversion plans / regulated sale and rent back agreements.

Is There A Minimum Value for Properties on which Equity Release is Available?

Providers will generally not accept properties which are valued at less than £70,000

Can I release Equity From My Home If I Have Not Yet Paid Off My Mortgage?

If you have an outstanding mortgage on your property, then this will need to be repaid in full either by using some of the proceeds from the equity you release or from other funds. Any additional monies that you release can be spent as you wish.

How Long Does It Take To Complete The Equity Release Process?

It will generally take 8-12 weeks, but this will vary from provider to provider

If I Already Have An Equity Release Plan Can I Release More Money?

This may be possible, but it will depend on your existing plan and if your balance and property value have changed since the time you took out the original plan.

By reviewing your existing plan, you could possibly achieve a lower interest rate and you may be able to release further equity.

Can I make Lump Sum Reductions?

Some plans now allow you to pay off the monthly repayment of interest or allow you to pay up to 10% of the original amount borrowed each year.

What Happens If I Want to Pay Off My Equity Release Plan Early?

Equity Release plans are intended to run for the rest of your life and are only normally repaid if you move into long-term residential care or when you die. As a result, this means that if the plan is repaid in full during its term then an early repayment charge may be applicable.

Will I Have to Make Any Monthly Repayments?

Generally, there are no monthly repayments that need to be made unless you have chosen to take out an interest-only payment plan. The reason for this is because the loan plus the rolled-up interest is repaid when the plan comes to an end. This will usually be when you either die or move into long-term residential care. The total amount owing to the provider will then usually be repaid from the sale of your home

What Happens If I Have To Go Into Long-Term Residential Care?

This will depend on the Equity Release plan that you choose and whether the plan is in your sole name or in joint names.

If the plan is in your sole name and you have to move into long-term residential care, then your home would have to be sold and the amount you released plus the interest accrued would have to be repaid.

If the plan is in joint names and only one of you has to move into long-term residential care, then the other home owner has the right to remain living in the property until they too have to move into long-term residential care or die.

Can I Still Move Home If I Have Released Equity?

Many equity release schemes will allow you to still move if you have taken out an equity release mortgage. However, there could be fees to pay and certain conditions may apply. The new property will need to fit the lenders criteria.

Can The Equity Release Provider Take My House Away From Me?

Mortgages provided by an Equity Release Council member provide you with the right to remain in your home until you die or must move into permanent long-term residential care.

Could I Owe More Than My House Is Worth?

Equity Release mortgages provide by an Equity Release Council member offer a No Negative Equity Guarantee meaning you will never owe more than the value of your home, ensuring that no debt is ever passed onto your estate.

What Is The Equity Release Council?

The Equity Release Council is a dedicated trade body that is supported by the leading providers of equity release within the UK. It was created to promote safe equity release schemes and to safeguard the interests of homeowners.

Is Equity Release Right For Me?

Equity Release is not right for everybody which is why it is very important to seek independent specialist advice.

Speak to a specialist

If you’re considering releasing equity in your home, it’s important that you get the right advice.

We can help you access specialists who know exactly which lenders are best positioned to offer favourable rates on equity release products.

Enquire Now

To be matched to a specialist mortgage broker.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the brokers we introduce you to, to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All brokers we introduce you to are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.