If you’re 55 or over and your money is tied up in bricks and mortar rather than your bank account, equity release could turn some of that value into cash — without you having to sell up and move on.
It’s become a popular option for homeowners who want to clear existing debts, top up retirement income, help family members onto the property ladder, or fund home improvements and other major costs, all while staying in the home they love.
Moving house later in life can be stressful, costly and disruptive. Equity release offers an alternative: stay in your home and unlock some of the value built up in it over the years, turning it into a tax-free lump sum, a regular income, or both.
We’ll walk you through every option in plain English and help you work out which — if any — fits your circumstances.
A RIO mortgage works much like a standard interest-only mortgage, except the loan itself is typically only repaid when you sell your home, move into long-term care, or pass away. You pay off the interest each month, so the amount you owe doesn’t grow over time. Minimum age requirements usually start at 50, though some lenders set the bar at 55 or 60.
A lifetime mortgage lets you borrow against your home as a lump sum, a flexible income, or a mix of both — with no monthly repayments required. Interest simply rolls up until the property is sold, typically when you and your partner have both moved into long-term care or passed away.
Many lifetime mortgages now come with a drawdown facility, so you only take the money you need, when you need it. This keeps your options open for the future and means interest is only charged on the cash you’ve actually drawn down, making it a more cost-effective route for many homeowners.
With a home reversion plan, you sell all or part of your property in exchange for a tax-free lump sum or a regular income, while retaining the right to live there rent-free for as long as you wish. These plans are generally only available to homeowners aged 65 and over.
Because you keep a rent-free right to remain, the amount you receive will be below the market value of the share you sell. When the property is eventually sold, you (or your estate) receive your remaining share of the proceeds — so you’ll know from the outset roughly what percentage of your home’s value will pass to your estate.
I’m doing my first ever re-mortgage and I have had a million questions and asked for several different options and he has walked me through everything with no jargon and helped me wrap my head round it.”
Charlie helped us so much to get our mortgage and even Michael was every time really helpful. For sure we’ll be back to them again in the future.
