The Benefits of Equity Release Explained

Equity release loans allow over-55s to take a cash lump sum from the equity locked up in their home, to use as they see fit. For many it’ll be a useful tool to help plan for a financially secure retirement but for others there could be all kinds of uses.

How Can I Use the Money Released From an Equity Release Scheme?

Most people who take out an Equity release loan do so to remodel their current home, clear their debts or to fund a second home. There are no limitations on how you use the money you borrow with Equity release.

There are many reasons to choose an equity release loan, including clearing any debts, remodelling your home or paying for a dream purchase. A tax-free lump sum can help you achieve your goals.

Continue reading to understand what Equity Release can be used for.

Looking for other information on Equity Release? This guide has info on 'Releasing Equity for new property' We have also written extensively about:

• - How safe are Equity Release schemes?
• - Jointly Owned property Equity Release schemes
• - Equity Release to help with Retirement Planning
• - Equity release schemes tax implications

We update all our guides regularly. If you are researching Equity Release and we haven't got an exact guide that helps you, keep coming back as we update daily.

Equity Release: Re-Mortgaging to Clear Debts

Over your lifetime, you may have built up debt which could be costing you a lot in regular repayments and interest. Whether it’s a car loan, or a credit card or a store catalogue account, debt can be crippling even when you aren’t about to retire and lose your regular income.

If you’re struggling to keep up with payments and you know you’re about to see a drop in your salary, then equity release could be a viable option to make things more manageable.

Your interest will compound, so you could end up owing more, but it’ll be repayable from your estate when you’re either in care or you’ve passed away. So, in the short term, for your quality of life, the tax-free cash you’ll get could clear your debts and let you breathe a little easier in retirement.

Equity Release: Re-Mortgaging to Remodel or Renovate

For many people, retirement is the time to relax and truly enjoy your hard-earned money and the home you’re living in. But maybe there’s some work on the house that you’ve never quite been able to afford, or the kitchen is looking a little tired.

Perhaps you want a conservatory where you can unwind, or you may wish to extend to add a guest bedroom for when the grandkids want a sleepover.

Using a tax-free lump sum through equity release, you can get the home you deserve to enjoy during retirement. You’ve worked all your life, and this is the time to reap the rewards – equity release can help you do that in the comfort you’ve always envisioned.

Equity Release: Re-Mortgaging to Buy a Second Home

Some choose to buy a second home when they reach retirement age. It could be to supplement your income through renting it out, or it might be that holiday property by the sea where you’ve always wanted to spend summers relaxing.

The lump sum that equity release gives you could open up the opportunity to find that new home, and get a mortgage approved that you otherwise couldn’t without the upfront cash.

Other Reasons for Equity Release

In short, you can use equity release for whatever you want. It might just be that you want a new car (or even that old classic car you’ve always held close to your heart). It may be that you want to go travelling on a luxury world cruise.

Equity release payments are tax-free, with no repayments to make until you go into care or have passed away, and so give you the opportunity to do achieve a dream that you otherwise couldn’t.

We’ve got comprehensive guides on everything to do with equity release, which you can use to get up to speed.

How Can Money Savings Advice Help You With Releasing Equity?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already thousands of people get the best Equity Release deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.