Top 10 Equity Release Facts

If you’re 55 years old, you’ll be eligible for a lifetime mortgage, where you keep your home but guarantee the repayment of the loan from your estate.

The alternative is a home reversion, which you can’t usually apply for until you’re 65. With this, you sell your home immediately but retain the right to live in it.

What Does the Value of My Home Have to Be to Qualify for Equity Release?

Equity release is a flexible form of borrowing against your home. You don't have to make repayments, and you're eligible if your home is worth £70,000 or more and you're at least 55 years old.

Continue reading to get the full 10 Equity Release facts.

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Equity Release Fact 1: There Are Different Schemes to Choose From

If you’re 55 years old, you’ll be eligible for a lifetime mortgage, where you keep your home but guarantee the repayment of the loan from your estate. The alternative is a home reversion, which you can’t usually apply for until you’re 65. With this, you sell your home immediately but retain the right to live in it.

Equity Release Fact 2: You Don’t Have to Take All Your Money at Once

If you choose a lifetime mortgage, you can opt for a drawdown loan which means you only borrow what you need from a set limit, helping to keep interest payments down. With home reversion if you decide against a lump sum, you could instead get regular payments as an extra income source.

Equity Release Fact 3: The Older You Are, the More You Can Borrow

Generally, the older you are when you apply for equity release, the higher a percentage of loan-to-value you can get on a lifetime mortgage, meaning it’s usually better to wait if you can.

Equity Release Fact 4: You Don’t Need to Make Immediate Repayments

Whichever equity release scheme you decide on, you won’t have to make any immediate repayments. A lifetime mortgage is repaid from your estate when you die or go into full-time care, and home reversion plans see your home sold once you no longer need it with all proceeds going to the lender.

Equity Release Fact 5: You Can Usually Repay Early – For a Fee

If you want to repay your equity release early, you usually can – but you’ll need to pay an extra charge to make up for the interest your lender will no longer receive.

Equity Release Fact 6: Your Credit History Probably Won’t Matter

As an equity release loan is secured against your property, most lenders won’t consider your credit history. There’s no risk of you not paying since they will legally have the right to take it from your property when you die.

Equity Release Fact 7: You’re Guaranteed to Be Able to Live in Your Home

With both a lifetime mortgage and a home reversion scheme, you are guaranteed the right to live in your home for as long as you need to. The home will only be sold when you die or move out into a care home permanently.

Equity Release Fact 8: Your Debt Can’t Exceed the Value of Your Home

As long as you choose an equity release loan with a lender backed by the Equity Release Council, you’ll have a ‘No Negative Equity’ guarantee – so even if interest builds over many years, you’ll never owe more than the value of your property.

Equity Release Fact 9: You Can Use Equity Release to Repay Your Mortgage

You don’t need to have paid you’re your entire mortgage to qualify for equity release, just a majority. Equity release payments do then have to repay your mortgage before you can use the cash for anything else.

Equity Release Fact 10: You Can Ringfence Part of Your Property for Your Family

If you like the sound of equity release but you want to guarantee you’ll at least have something to pass onto your loved ones as inheritance, you can choose to ringfence party of the equity and not include it in the loan, so it’s kept safe to be passed on.

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 helped 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.