Is equity release right for me?

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With equity release, homeowners aged 55 and over can unlock the tax-free cash tied up in their homes to enjoy spending.

We’ve answered some of the questions you might have about releasing money from your home.

How much can I access?

You could unlock from a minimum of £10,000 up to 58 percent of the value of your property. The amount of money that you can access is determined by the age of the youngest homeowner and the value of your property. You must be at least 55-years-old and your property must be worth £70,000 or more.

One of the main benefits of equity release for many people is that it provides you with a tax-free lump sum of cash and you’re not required to make any repayments if you don’t wish to.

How is that possible?

Equity release runs for the rest of a person’s life until the last homeowner passes away or moves into long-term care. With a lifetime mortgage, the loan and interest are normally repaid at this point, there is no requirement to make monthly repayments.

The rise in popularity of equity release means that there are now more plans on the market than ever before. Some allow you to pay off some of the interest each month, and you can choose a percentage that suits you. By paying a percentage of the interest you can reduce the amount of debt that is being rolled up.

Is there a difference between equity release and a later life mortgage?

A later life mortgage runs until a certain age. Like a standard mortgage, a later life mortgage can be arranged as capital repayment or interest-only and borrowing is dependent on income and affordability, with monthly repayments required.

What happens if I move into care? How will the house sale be handled and the loan repaid?

When the last or remaining homeowner goes into care then the plan will need to be repaid.

Providing the property is sold for market value, most plans provide assurances that you can never be left owing more than the house is worth. This is called the no negative equity guarantee, all plans that meet the Equity Release Council’s product standards come with this safeguard.

How do I find a reputable broker?

The Equity Release Council is the industry body for the equity release sector. The Express Equity Release Service is provided by Age Partnership, who are the UK’s number 1 equity release specialist*.

Age Partnership offer a whole-of-market service. This means they aren’t tied to a particular lender so can find you the most suitable plan for your individual requirements from the wide range available.

Through the Express Equity Release Service, initial advice is provided for free and without obligation. Only if you choose to proceed and your case completes would a typical fee of £1,795 be payable.

How would I know if equity release is right for me?

Speak to an adviser and get a recommendation which is bespoke to your individual requirements. Advisers such as Age Partnership will provide this initial quotation for free, as it helps you to explore whether equity release is the right solution for you.

An adviser will also talk to you about alternatives to equity release, such as unsecured lending, downsizing, grants, benefits, taking in a lodger and using savings or pensions.

They will also encourage you to discuss your equity release plans with family and friends to see what they think and involve them in the process, as it’s likely to impact them later down the line.

*Based on volume of plans, Touchstone data 2018 – Q3 2020

Equity release may involve a home reversion or a lifetime mortgage, which is secured against your property. To understand the features and risks, ask for a personalised illustration. Equity release requires paying off any existing mortgage. Any money released, plus accrued interest would be repaid upon death, or moving into long-term care.

Correct at time of publication. Age Partnership Limited is authorised and regulated by the Financial Conduct Authority. FCA registered number 425432. Company registered in England and Wales No. 5265969. Company address: Age Partnership Limited, 2200 Century Way, Thorpe Park, Leeds, LS15 8ZB. VAT registration number 162 9355 92.
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