Equity Release Plans
There are two types of equity release: lifetime mortgages and home reversions. Discover more about these options and understand how equity release works.
Exploring Your Equity Release Options
When it comes to equity release, there’s a variety of plans to consider, each offering unique benefits.
Whether you opt for a lifetime mortgage or a home reversion plan, it’s essential to explore additional options and features to ensure maximum flexibility.
Under these plans, the cash you release is usually repaid upon your passing or when you transition into long-term care.
During this period, you retain the right to stay in your property and may even have the opportunity to safeguard a portion of its value to pass on to your beneficiaries.
Lifetime Mortgages
A lifetime mortgage serves as a loan that allows you to access tax-free cash by leveraging the value of your home as security. Typically, the loan amount and accrued interest are repaid through the sale of your property after your passing or upon moving into long-term care.
Upon the conclusion of your plan, any remaining funds, after settling the loan and interest, are paid to your beneficiaries. In some instances, certain plans offer the option to ring-fence a portion of your property’s value, ensuring an inheritance for your loved ones.
This means that your beneficiaries won’t be required to pay any additional funds if the sale of your property doesn’t cover the total loan amount and accrued interest.
Home Reversion Plans
While less common, home reversion plans offer an alternative avenue for equity release that may better suit certain individuals than a lifetime mortgage. With this type of plan, you have the option to sell all or a portion of your property at a value below market rate in exchange for either a lump sum, regular income, or both.
Under a home reversion plan, you retain the right to reside in your home as a tenant, without the obligation to pay rent, until you either pass away or transition into long-term care.
Enhanced Equity Release
Typically, health conditions or lifestyle choices don’t offer financial advantages. However, with enhanced lifetime mortgages, your unique circumstances are recognised.
By disclosing your medical history, you might be able to unlock more money from your home. These mortgages offer higher cash releases or lower interest rates if you have certain health conditions or lifestyle factors.
Can you switch equity release?
If you’re already engaged with a lifetime mortgage, exploring the option to switch could be a wise move. There’s a chance you could secure a better deal, particularly if you’ve aged since taking out your existing plan.
Additionally, any increase in your property’s value or changes in your health status might qualify you for additional funds.
Moreover, fluctuations in interest rates could potentially result in substantial savings over the lifespan of your plan.
It’s worth investigating your options to ensure you’re making the most financially sound decision.
How much can you release?
You can usually release a minimum of £10,000, but the maximum amount varies based on several factors, such as your property’s value and your age.
Typically, the older you are, the more you can release.
Looking for a quote?
While we do not provide a quote or call-back service as our website is purely informational, we understand that some people do want an equity release quote.
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To find out how to get the best equity release quote read our guide
