Why Equity Release

There are two different kinds of equity release plans, ‘home reversion’ and ‘lifetime mortgages’.

If you take out a home reversion plan, a provider buys all or part of your home from you, and you are able to remain in your house as a tenant for the rest of your life.

A lifetime mortgage allows you to retain ownership of your property. It’s a loan taken out against the value of your home that is repaid when you die or go into long term care, along with any interest that has accumulated. 

With a lifetime mortgage you can:

• take a lump sum;

• draw down smaller amounts from a cash reserve facility as and when you need it;

• decide whether to pay all or some of the interest payments or let the interest roll up—at a later date you could decided to stop making payments and let the interest roll up;

• have regular income payments

• ensure you leave an inheritance by adding additional protection

Every lifetime mortgage is personal and is based on the current property value and the individual circumstances of the homeowner. 

Not all lenders offer the same options, and sometimes those options are reflected in the interest rate, which is why it is important to research the market before making a decision.