Equity release allows UK homeowners aged 55 and above to access their property wealth as tax-free cash, secured against the value of their home. The amount of equity you could release will depend on your age and the total value of your home. This tax-free cash can be taken as a lump sum or as an initial lump sum then releasing smaller amounts when needed (subject to minimum amounts).
- You'll have tax-free cash to spend however you like
- You won't have to make any monthly repayments unless you want to (with an interest only lifetime mortgage)
- You'll never owe more than the value of your home
- You can access the money when you need it
As with many products, equity release has its drawbacks. For instance, it is a loan secured against the value of your property, which means it will need to be paid back when on death of the last borrower, or when the last borrower moves into long-term residential care. The value of your estate will be reduced as a result of equity release. Below you can find some other considerations.
- Interest will accrue and compound over the duration of the plan
- Taking equity release could result in your entitlement to means tested state benefits being reduced or removed
- You might be subjected to Early Repayment Charges
- You have to pay set up fees
