About Equity Release
The equity you have in your home is the difference between the value of the home you own, less any mortgage you may have on it. Equity release is the term given to unlocking or making available some, or all of this value whilst continuing to live in the property. This can be achieved through two different types of plan; Lifetime Mortgage or Home Reversion. Both plans are regulated by the Financial Services Authority (FSA).
Lifetime Mortgage
With a lifetime mortgage you retain full ownership of your property, and you may even benefit if the value of your home increases. As property prices increase you may be able to release more equity if needed.
There are a variety of Lifetime Mortgages available in the marketplace. You can choose plans depending how you would like the loan amount advanced to you - in a lump sum, regular payments or via draw down (where you will be able to draw on the funds as and when you need it).
You can also choose a plan which protects the equity in your home, ensuring that the debt does not grow to more than the agreed percentage of your property value. This, for example, will ensure that a guaranteed percentage of your property can be left for your beneficiaries.
There are also different interest rates you can consider, from fixed rate to variable interest rate options.
Home Reversion Plan
With a home reversion plan you agree to sell a percentage of your property to a home reversion company in exchange for a tax-free cash lump sum and guaranteed lifetime lease (this gives you the right to remain living in the property until it is sold after your death, or earlier if you move into another property or into a care home).
Home reversion plans can be set up on a lump sum basis or effectively on a draw down basis, with the ability to sell further shares of your property in the future.
Please note:
1. Releasing equity may reduce your state.
2. Releasing equity may affect your entitlement to means-tested state benefits.
For more information on Lifetime Mortgages and Home Reversion Plans, download our Equity Release Guide FREE in the 'Catalogue' tab or call our impartial service on 0845 2300 820.
Equity release may involve a lifetime mortgage or home reversion plan. To understand the features & risks ask for a personalised illustration.
