Equity Release

One way of funding live-in care is by taking advantage of your property wealth with equity release

Family homes often hold treasured memories and downsizing might seem out of the question. A Lifetime Mortgage, the UK's most popular form of equity release, might offer an alternative financial solution.

Many of us will have equity tied up in the bricks and mortar of our homes. But what exactly is equity? Simply put, your equity is the value of your home minus any loans secured against it. 

To be able to access this equity, you might consider: 

– Selling and moving to a smaller property 

– Borrowing money from the bank by re-mortgaging and paying interest on the loan 

– If neither of these are right for you, you might then consider a formal equity release scheme known as a Lifetime Mortgage. 

What is a Lifetime Mortgage?

Rising house prices across the UK over recent decades means that the UK’s over-55s have more equity than ever locked up in their properties, equity that can be accessed using a Lifetime Mortgage, the most popular fam of equity release.

With a lifetime mortgage, unlike other forms of equity release, you can release tax-free cash from your home whilst retaining full ownership of your home, and without having to commit to making monthly repayments. 

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Funding your live-in care

By releasing equity, you could use your lump sum to cover the costs of your live-in care. Equity release with a Lifetime Mortgage can offer a viable funding option for those who are considering how best to fund their live-in care.

When considering equity release as a funding option, you will need to receive independent financial advice. We can introduce you to Responsible Equity Release, who are Lifetime Mortgage specialists, to provide you with an appointment with a local adviser.

The adviser will help you to understand if equity release is right for you, as well as help you to understand the impact it could have on your estate’s value and entitlement to means-tested benefits.

Use the calculator opposite to see what you could release

Are you eligible?

To be able to release equity you have to meet certain criteria which in dudes 

– Youngest deed holder must be aged 55 or over 

– The property must be worth £70,000 or more 

– The property must be in the UK and be the main residence for 6 months of the year or more 

– The minimum loan amount is £10,000 

How does equity release work?

Equity release comes in two main forms – Lifetime Mortgages and home reversion plans. Our provider, Responsible Equity Release, only advises on Lifetime Mortgages as with a Lifetime Mortgage you retain full home ownership.

To release equity with a Lifetime Mortgage you must be a UK homeowner aged 55 or over, and the amount of cash you can release from your property depends on your age and property value.

The Lifetime Mortgages don’t come with a fixed end date, rather they are only due for repayment once the last homeowner on the deeds either dies or enters into long-term care. Interest is charged on the amount released, with interest rates typically fixed for life.

If you do not choose to make repayments over the course of the loan, then the amount borrowed, plus interest is simply repaid at the end of the term, often via the sale of the property.

With some plans you can make voluntary repayments without penalty, typically of up to 10% of the initial amount borrowed each year. This is another way you can reduce the build-up of interest and mitigate the impact of the Lifetime Mortgage on the size of your estate.

Responsible Equity Release can put you in touch with a dedicated local adviser who will consider all of your priorities and requirements before making a recommendation.

Use the calculator opposite to see what you could release

Do I qualify if I already have mortgage debt? 

You are eligible if you already have mortgage debt on your property, however the mortgage must be repaid. The amount you are releasing can be used towards repaying the existing mortgage. Many customers use equity release for this very purpose and choose to release a little extra to enjoy their retirement with.

Can I move? 

All plans covered by The Equity Release Council are ‘portable’ This means you can move the full mortgage to another suitable property without having to pay any penalty. 

How much can I release? 

The amount you can release varies depending on a few factors. Notably, the age of the youngest applicant i e. you or your partner, your location in the UK, your property value and your medical history.

You can get a free online quote by using our equity release calculator provided by our chosen equity release providers, Responsible Equity Release.

Is equity release safe?

Equity release is regulated by the Financial Conduct Authority Equity release is now one of the most regulated products in the UK. These regulations exist to allow you to make the most of your property wealth without having to worry about what is going to happen to your home. 

Alongside the regulator, the Equity Release Council has been established to provide customers with further protection and guarantees designed to ensure you are always safe when you release equity.

Can I lose my home? 

All Lifetime Mortgages from Equity Release Council approved lenders guarantee you the right to remain in your property for as long as it is your main residence (subject to terms and conditions). This guarantee is written into the offer that both you and the lender will sign. You will still own your home you’ll remain the legal owner of your  home for as long as you require it as your primary residence.

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Can I still leave an inheritance?

There are plans available where you can ‘protect your equity’. You choose an amount to protect as a percentage, allowing you to ring-fence a portion and say no matter what, the decision to release equity will not affect that portion cf the property.

When and how do I repay?

There no required monthly repayments. The loan is normally repaid, along with the accrued interest, through the sale of your property once the last homeowner on the deeds has either passed away or entered into long-term care.

You can repay early there are flexible withdrawal and repayment options. Plans are available which allow you to make voluntary payments. If you wished to repay the total amount plus accrued interest there may be an early repayment charge.

Most equity release providers will allow your estate up to 12 months to sell the property. As long as they are taking reasonable steps to sell the property or repay the mortgage by other means, that is mainly what the lender looks for.

Use the calculator opposite to see what you could release

Call our dedicated equity release helpline