Equity Release

Lifetime mortgage

A mortgage is secured on your property and you retain ownership. Borrowers can choose to protect some of the value and use as an inheritance for your family. Repayments can be made or rolled up and the loan amount and interest is paid back when you die or move into long term care. The minimum age you can take out a lifetime mortgage is 55. You can normally borrow 60% of the value of the property.

Home reversion

This allows you to sell all or some of your home to a reversion provider. In return you will receive either a lump sum or regular payments. The amount you will receive will usually be between 20% and 60% of the market value. There is a minimum age at which you can take a home reversion plan out and some providers set this at 60-65.

Both the lifetime mortgage and the home reversion have a no negative equity guarantee which means that even after all fees are paid and the property is sold if there is not enough money to pay back the loan you or your estate will not be liable to pay anything back. Under both plans you have the right to remain in the property until you die or move into long term care provided it is your main residence and you abide by the terms and conditions which will usually include inspections of the property every couple of years.

However, if you do release equity from your home you may not be able to depend on your property for income you may require later in your retirement.

For more information on Equity Release, please contact us.