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EQUITY RELEASE

Equity Release is a product that is becoming more and more popular every year, clients are finding themselves with a lot of money tied up in the asset of the home and accessing this money can be very useful. Whilst the reasons for wanting the money can be extensive, the most common reasons are :

 

  • To provide a tax free income in addition to any pension income

  • To provide a lump sum for home improvements

  • A gift to children

  • To help reduce inheritance tax bills

 

Once I speak to a client the first question is normally, "How much can I borrow?" Whilst these figures do change from time to time I have listed some general information below.

 

Age 55 up to 27% of the property value

Age 60 up to 33%

Age 65 up to 38%

Age 70 up to 45%

Age 75 up to 48.5%

Age 80 up to 53.9%

Age 85 up to 56%

 

If you would like to know figures based on your specific circumstances, or just require general information, please give me a call.

 

We don’t charge fees for giving advice and arranging Equity Release products as we receive a commission from the lender. Below is a basic description of the two main Equity Release schemes available, however we very rarely find there is a great deal of use for the Home Reversion Scheme.

LIFETIME MORTGAGE

A mortgage secured on your property provided it is your main residence, while retaining ownership. You can choose to ring-fence some of the value of your property as an inheritance for your family. You can choose to make repayments or let the interest roll-up. The loan amount and any accrued interest is paid back when you die or when you move into long-term care.

HOME REVERSION

You sell part or all of your home to a home reversion provider in return for a lump sum or regular payments. You have the right to continue living in the property until you die, rent free, but you have to agree to maintain and insure it. You can ring-fence a percentage of your property for later use, possibly for inheritance. The percentage you retain will always remain the same regardless of the change in property values, unless you decide to take further cash releases. At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership.

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