Equity Release

Equity Release allows you to access the cash tied up in your home. Before equity release schemes, the main way of unlocking capital from your home was to sell it and buy a smaller property, or to move to a less expensive area. Equity Release allows you to stay in the family home and avoid the stress and expense of moving house while delivering the cash you require.

With equity release you borrow against the value of your property to release cash for whatever purpose you require. For example, equity release can provide a cash sum or additional income to help improve quality of life. Equity release may be used to fund home improvements, purchase a new car or to pay for that dream holiday. The cash released may be used to acquire a suitable care plan to eliminate the worry about what may happen as you get older. Equity release plans can be used to mitigate inheritance taxes by moving capital out of the home to then be gifted or otherwise protected using tax planning techniques. Equity release may simply be used to set aside a pot of cash as reassurance against those unexpected future expenses.

There are two main types of equity release:
• Home reversion equity release scheme - Here you sells your home, or a percentage of your home. In return, you receive a cash lump sum or a monthly income, or a combination of both. The equity release loan is not repayable until you or your partner (whoever survives the longest) dies or is transferred into long term care and you can remain in the house rent-free until then. At that time the property is sold and the equity release lender reclaims their percentage along with any rise in value of that percentage with the remainder of the proceeds going to you or your beneficiaries. The amount of equity release that will be available to you will normally depend upon you age and gender. The younger you are, the less you receive. Women will generally be entitled to less than men as it is assumed that women are expected to live longer and will make the equity release lender wait longer for repayment.

• Cash release equity release - With a cash equity release scheme, you take out an interest only mortgage on your property. You do not pay any monthly repayments. Instead the interest is accumulated over the life of the mortgage. When you or your partner (whoever survives the longest) dies or is moved into long-term care, the equity release loan plus accumulated interest becomes repayable. The longer you live the more interest you will owe. Equity release mortgages are available that guarantee that you will not owe more than the value of the house.

Equity release mortgages can be complex. Let an expert find the best equity release for you: Equity Release Enquiry.