Equity Release

Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.

Equity Release & Lifetime Mortgage plans will reduce the value of your estate and can affect your eligibility for means tested benefits

What is Equity Release?

For clients over the age of 55 who are considering releasing money from your home, equity release could provide you with the option to boost your finances. With guidance from our expert advisor, you will be under no obligation to proceed and we welcome any questions you may have.

If you’ve owned your home for a number of years then you may have built up some equity. Releasing that equity is a way of raising money secured against your current home that can be used for any purpose, whilst maintaining full rights to reside in your property for the rest of your life.

Our expert, qualified advisor can guide you through the process under no obligation to identify whether Equity Release is the most appropriate option for you.

Equity Release can be used for plans such as:

  • Home improvements
  • Holidays
  • A new car
  • Debt consolidation
  • Gifted money to children or grandchildren

How does it work?

Releasing equity from your property is a big decision and one that should be researched thoroughly. Our qualified, dedicated advisor is here to outline the options you have available with Equity Release. Your current circumstances and requirements will be assessed to ensure we establish the most suitable solution for you and our recommendations will be tailored to you and your personal needs.

To qualify for equity release you must be over the age of 55 and currently own your property you are looking to release equity from.

There are a number of Equity Release plans we can offer advice and guidance on:

Lifetime Mortgages:

A lifetime mortgage is a long term loan secured against your property, providing the options to withdraw a sum of money for your own personal use. You will retain full ownership of your home with the right to reside there for life or until you potentially go into long term care.

This plan allows you to take a cash lump sum of the equity for personal use; there are no restrictions on what you use this money for. Interest would then be charged on this cash lump sum and added to the loan, this is called compounded interest and the full loan plus the interest would be repaid when the plan comes to an end or the property is sold. There are no monthly payments with a lifetime mortgage so you don’t have to worry about any additional monthly outgoings.

Generally, interest will roll up however, certain providers will allow you to service the debt subject to their terms and conditions

With a lifetime mortgage you also have the option to drawdown money from the equity in your home in stages instead of a full lump sum. You would then only be charged interest on the amounts you drawdown, saving you money over the lifetime of the plan. This option allows you the freedom to release money when it is required, instead of withdrawing a large sum at the very start. This could come in handy should you only need a small amount for a new car or a holiday, leaving the rest of the equity in your facility with the provider.

Top tips to consider with a Lifetime Mortgage:

  • You retain full ownership of your property
  • Interest is charged is added to the loan resulting in no monthly payments
  • Some lenders allow you the option to repay up 10% of the initial loan amount annually with no penalties should you wish
  • The money can be used for any purpose
  • Discuss this option with your family
  • Explore alternative financial solutions
  • Seek professional advice from our advisor before considering a Lifetime Mortgage

Our advisor will assess your requirements and advise on the options available, a personalised illustration will then be provided by our advisor to outline the features and risk of a lifetime mortgage. For additional information please contact us directly to answer any questions you may have.

Interest only retirement mortgage:

An interest only retirement mortgage is different to the previous equity release plans mentioned in that they are very similar to a conventional residential mortgage.

Interest only retirement mortgages are aimed at individuals who want to release equity from their property, but who also want to repay the interest on a monthly basis. This requires evidence of repayment options via pension income or retirement income. Similar to a conventional mortgage, it is important that you keep up with your monthly payments to the provider. Failure to do so may result in the provider repossessing your property. The capital loan will need to be repaid in full at the end of the term.

The amount you can borrow against your home is based on your ability to repay the interest on a monthly basis, taking into account your current monthly expenditure. The capital loan must be repaid at the end of the term agreed; this can be done with either the sale of the property, sale of other assets or cash lump sum injection.

You will still retain ownership of 100% of your property and you can repay the capital loan at any point throughout your mortgage, you may be subject to repayment charges however with some providers if you choose a fixed rate product. Standard variable rate (SVR) products are also available which would result in potential fluctuations in your monthly payments. Our advisor will assess your requirements and tailor the advice and recommendations to you, ensuring the product is suitable for your future plans.

Top tips to consider with an Interest Only Retirement Mortgage:

  • You will retain 100% ownership of your property
  • You will need to provide proof of pension income or retirement income to identify the source of monthly repayments
  • The term of the loan is based on the youngest borrowers age and some providers will lend up to their 95th birthday
  • An interest only retirement mortgage helps to keep costs down by servicing the interest throughout the term of the loan
  • You will only be repaying the interest on a monthly basis
  • You will require a repayment strategy at the end of the term, this can be via the sale of the property, sale of another asset or a cash lump sum payment
  • How much you can borrow is based on an assessment of your ability to afford the loan via income
  • Explore alternative financial solutions
  • Seek professional advice from our advisor before considering an Interest Only Retirement Mortgage