Equity Release

What types of equity release plans are there?

There are two main types of equity release:

• Lifetime mortgage. This is the most common type of equity release. You borrow money secured against your home. The mortgage is usually repaid from the sale of your home when you die or move permanently into residential care.
• Home reversion plan. You raise money by selling all or part of your home while continuing to live in it until you die or move into permanent residential care.

Who can get equity release?

There are certain conditions you must meet before being able to take out equity release.

• For a lifetime mortgage you (or both of you, if you’re borrowing jointly) need to be at least 55 years old.
• For a home reversion plan you (or both of you, if you’re taking out a plan jointly) need to be at least 65 years old.
• You must own property in the UK, which must be your main residence.
• Your property must be in reasonable condition and over a certain value, and there may also be restrictions on the type of property accepted.
• If you have a mortgage or secured loan on your property you may still qualify for equity release, but it will depend on the value of your home and the amount outstanding on the existing mortgage or loan. You’ll have to pay off any outstanding mortgages or loans secured against your home at the same time as taking equity release.
• Equity release may not be suitable if you have dependants living with you. Any dependants should take separate legal advice. If they wish to remain living with you in the property, they may need to sign a waiver confirming that they understand they don’t have the right to reside there if you die or move into permanent residential care.

Finding an adviser:

Always get advice from a specialist equity release adviser before taking out equity release. Search for a financial adviser through:

• the Money Advice Service’s retirement adviser directory
• the Equity Release Council
• the Personal Finance Society