Equity Release Schemes from 5.74%

Equity release is a popular option for homeowners and purchasers over the age of 55 who are looking to release some or all of the equity tied up in their property or to complete a purchase.

Equity release for homeowners gives the option of tapping into your home’s value by raising a large lump sum or a series of smaller payments which can be used for a number of reasons.

  • Age 55 and upwards (the older the client, the higher the potential for borrowing)
  • You remain the legal owner of the property and do not become a tenant
  • Schemes are available with free valuation and legal fees
  • Equity can be released for virtually any legal reason
  • Income is unimportant as monthly payments are not normally required
  • Long-term fixed-rate deals are available
  • The only time the finance will be repaid will be upon moving to another main residence, moving into long-term care, or death
  • Adverse credit is acceptable
  • For clients who are cash-poor but asset-rich
  • No negative equity guarantee, which means the loan will never exceed the sale price of the property
  • Money can be raised on an existing property or on a purchased property
  • Usually portable
  • Used as a form of inheritance tax planning
  • Part- or full-repayment options are available
  • Agreed-upon drawdown facility for future requirements without the need for a new application

Equity release options

The lifetime mortgage is the single most popular equity release product in the UK, accounting for around 99% of all equity release products provided by lenders.

With a lifetime mortgage, you take out an entirely new mortgage on your property but retain full ownership of it in the same way as you would with a standard mortgage product. An equity release mortgage enables you to free up some or all of the equity you have tied up in your home, after which the total loan balance along with all interest and borrowing costs are repaid upon death, when you move into long-term care, or when you decide to sell.

Equity release schemes have advantages and disadvantages like most financial products, which should be discussed in depth with an independent advisor before going ahead.

Before applying, take note:

  • A specialist equity release mortgage can be more expensive than a conventional mortgage and charged at a higher rate.
  • You cannot access all the equity tied up in your property.
  • Equity release schemes may have restrictions, as you may be unable to perform certain home improvements or work without seeking permission.
  • While the money accessed through an equity release scheme is 100% tax-free, it may affect your entitlement to state benefits. Equity release will also reduce the value of your estate to be passed on to your beneficiaries after your death.
  • Some equity release schemes have high exit penalties when the mortgage is repaid.