Trusted advice on pensions & retirement, mortgages, inheritance tax planning, and more.
Equity release allows homeowners aged 55+ to access tax-free cash from their property without having to move. Whether via a lifetime mortgage or home reversion plan, it’s a long-term decision - and one best made with financial advice.
Equity release is a way of releasing the wealth tied up in your property without having to sell it and move to another home. You could either borrow against the value of your home, or sell all or part of it in exchange for a lump sum or regular monthly income. It’s also possible to release more equity from your property later in life if required.
Equity release is designed to help customers over the age of 55 years who own their property outright or have small mortgages left to pay.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Equity release, including lifetime mortgages and home reversion plans, will reduce the value of your estate and can affect your eligibility for means tested benefits.
You could qualify for equity release if:
You are aged 55 or over (for lifetime mortgages)
You own your home in the UK and it’s your main residence
Your property is in good condition and meets the lender’s minimum value
You have little or no mortgage left (existing mortgages can often be repaid with the released funds)
You want to release money from a freehold or long-leasehold property
You meet the provider’s lending and health criteria
For joint applications, both applicants usually need to be 55 or older
The amount you can release depends on your age, property value, and sometimes your health
Your adviser will check your eligibility and recommend the most suitable plan for your situation
Equity release allows homeowners aged 55 and over to unlock the value of their property and access tax-free cash without moving.
A lifetime mortgage lets you unlock tax-free cash from your home if you’re 55 or over. Interest is added to the loan and repaid when the property is sold.
With a home reversion plan, you sell part or all of your home for a tax-free lump sum and stay living there for life. You can remain rent-free and may still leave an inheritance.
A flexible drawdown plan lets you access funds from an agreed cash reserve whenever you need them. You only pay interest on the money you withdraw, which can make it a more cost-effective option.
A home income plan unlocks equity from your property and converts it into a lifetime income through an annuity. You may also get a smaller lump sum.
Most equity release plans offer a no-negative equity guarantee, with options to protect a set share of your home’s value, such as 30% for inheritance.
Some equity release providers offer enhanced plans that let you release more capital if you have certain health conditions. This can help you access extra funds to meet your needs.
Access to tax-free cash
Stay in your home
Flexible drawdowns
No monthly payments (for many lifetime mortgages)
For joint applications, both applicants usually need to be 55 or older
The amount you can release depends on your age, property value, and sometimes your health
Your adviser will check your eligibility and recommend the most suitable plan for your situation
Initial consultation and needs assessment
Property valuation
Recommendation of appropriate plan
Legal advice & documentation
Plan implementation and drawdown
Ongoing review
There are two main types of Equity Release: Lifetime Mortgages and Home Reversion Plans. To help you make an informed decision, we have outlined the differences between each type of Equity Release and what factors to consider.
A lifetime mortgage is a type of mortgage where you choose to extract your fund through a single lump sum or in smaller amounts over time, to the maximum limit agreed with your provider.
With a lifetime mortgage, you can also retain some of the property’s value as an inheritance for family members if this is something you are considering.
By choosing a lifetime mortgage, you retain full ownership of your home and the loan’s interest can be fixed or rolled up. The loan and rolled-up interest are repaid by your estate when you pass away or, depending on your circumstances, move into care permanently. For a couple, it would be based on the last to survive.
Lifetime mortgages can offer the ability to make monthly interest payments in part or full, therefore maintaining the debt to the minimum amount before interest.
The amount released depends on your age and the value of the property. Some providers can offer larger sums to those with particular past or present medical conditions, or lifestyle factors.
A home reversion plan allows you to access all, or part, of the value of your property while retaining the right to remain in it rent-free. With home reversion, the provider will purchase all, or a percentage, of your house.
You will understand precisely what portion of the property you have parted with and what has been ring-fenced for later use. The percentage you retain in your property always remains the same, regardless of the change in property value, unless you decide to take further cash releases.
At the end of the plan, your property is sold, and the sale proceeds are allocated according to the remaining proportions of ownership.
Like lifetime mortgages, you may be able to access more funds, depending on your age and medical conditions.
You will be provided with a cash lump sum or regular payments, and a lifetime lease guaranteeing you the right to stay in your property rent-free for the rest of your life. You’ll be able to live in your home freely, precisely as before.