What is equity release?
Equity release allows you to access your property's value for more cash.You can take a tax-free cash lump sum or access flexible borrowing whether you're planning home improvements or supplementing your retirement income. but equity release is an expensive, lifetime, commitment.
If you're facing a pension shortfall or need to meet an unexpected expense, equity release can seem attractive. It allows you to tap into the wealth you've accumulated in your property without the hassle of having to move.
What are the Equity release options?
There are two main types of equity release:
- Lifetime Mortgages
- Home Revision
you take out a mortgage secured on your property, while retaining ownership. You can choose to ring-fence some of the value of your property for your family. You can choose to make repayments or let the interest roll-up.
The loan amount and any accrued interest is paid back when you die or when you move into long-term care.
However, some lifetime mortgages do now offer you the option to pay all or some of the interest, and some let you pay off the interest and capital.
you sell part or all of your home to a home reversion provider for a lump sum or regular payments. You have the right to continue living in the property until you die, rent free, but you have to agree to maintain and insure it.
You can ring-fence a percentage of your property for later use, possibly for inheritance. The percentage you retain will always remain the same regardless of the change in property values, unless you decide to take further cash releases.
At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership.
This is a liftime Mortgage/Home Reversion Plan to understand the features and risks, ask for a personalised illustration.