What is Equity Release?



If you’re over 55, you may be considering an equity release product. These products allow you to release some of the money, or equity, in your home and can be used to help supplement your pension income or pay off your existing mortgage. The amount of money you can release depends on your age and the value of your property.

There are two types of equity release products – ‘lifetime mortgages’ and ‘home reversions’. With 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, however, allows you to retain ownership of your property. It is a loan taken out against the value of your home that, alongside any charges or interest accumulated, is only paid back when you die or move into long term care. This money can be taken out as a lump sum, or you can choose to drawn down smaller amounts from a reserve facility as and when you need it. Lifetime mortgages come with a range of product features. For example, you can choose to make repayments or let the interest roll-up, and you have the option to protect some of your home’s equity so that you can leave inheritance to your loved ones.  

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