If you own a property worth at least £70,000 and you are aged 55 and over, you could be eligible to release equity from your home using a lifetime mortgage. This type of equity release plan enables you to tap into some of the cash locked in your home and use the money to boost your retirement disposable income or spend as you wish.
There are typically no monthly payments to make as the full amount owed is designed to be repaid from the sale of your home upon your death or when you move into long-term care.
Equity release has soared in popularity over the years, with billions being released by over-55 homeowners each year. It has evolved and changed significantly in recent years, with new providers entering the market contributing to an increase in the number of products available.
How much cash can I release from my home?
The amount of equity that you can release from your home is primarily dependent on your home’s value and your age, but can also be impacted by your health. By using our equity release calculator, you can see an estimate of the amount that you could release and be put in contact with our equity release partners, Responsible Equity Release.
What if I have an outstanding mortgage?
As long as you use the released funds to pay off your existing mortgage, you can still qualify for a lifetime mortgage. Releasing equity is increasingly being seen as something of a lifeline for those struggling to pay off their interest-only mortgage as well.
Is equity release safe ?
Equity release is fully regulated by the Financial Conduct Authority. When looking for an equity release product you should also ensure that the providers are members of the Equity Release Council, which will provide you with extra safeguards such as a no-negative-equity guarantee.
This ensures that regardless of what happens to house prices, when your equity release mortgage comes to an end, you will never owe more than the value of your home.
The Telegraph works in partnership with Responsible Equity Release, an award-winning equity release specialist, which advises on plans from lenders approved by the Equity Release Council. All equity release sales must be accompanied by impartial professional legal advice.
It is important to obtain equity release advice from a specialist , who will ensure you are made fully aware of the costs involved, and what taking out a type of mortgage for the over 60s means for you and your family. They will also explain how equity release may reduce the value of your estate and may affect your entitlement to means-tested benefits.
Will I still own my home with equity release?
With a lifetime mortgage, the most popular type of equity release, your home remains your own; you have the right to continue living there for as long as you choose, or until you enter long-term care. Equally you are free to sell your home and move at any point in the future and take the mortgage with you (subject to lender's criteria). Just like a traditional mortgage, a lifetime mortgage is a loan secured against your property.
Can I involve my family?
Absolutely. A lifetime mortgage will affect the inheritance you leave, so it is important for your whole family to understand how equity release works and be involved in the decision-making process. Your Responsible Equity Release adviser will actively encourage you to involve your family in the entire process including making them welcome to attend your appointments with your adviser if you wish.
How much does equity release cost?
Average equity release interest rates are at record lows, and can be fixed for the lifetime of the mortgage so you know exactly what it will cost. Taking advice from an independent specialist like Responsible Equity Release means you will have full access to the best equity release deals across the whole of the market.
Your adviser will explain any other costs that may be involved, such as solicitor fees, valuation fees and adviser fees. You will be provided with an illustration detailing all of the costs involved, ensuring you are fully aware of what releasing equity will cost you before you commit to going ahead.
How do I find out more about equity release?
You can read our free equity release guide co-produced by The Telegraph Media Group and Responsible Equity Release. The guide is the ideal first step towards discovering whether equity release could be the right financial move for you.
Unless you decide to go ahead, Responsible Equity Release’s service is completely free of charge as the typical advice fee of £1,490 will only be charged if your case completes.
- Try our free equity release calculator now and see how much tax-free cash you can release
Please note we are not authorised to provide advice or arrange equity release products, so we have partnered with a leading equity release specialist to provide this service to you.
This is a Lifetime Mortgage which may impact the value of your estate and could affect your entitlement to means-tested benefits. To understand the features and risks, ask for a personalised illustration.
The Telegraph Equity Release Service is provided by Responsible Equity Release. Responsible Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,490.
By consolidating your debts into a mortgage, you may be required to pay more over the entire term than you would with your existing debt. Think carefully before securing other debts against your home.
Telegraph Equity Release Service is provided by Responsible Life Limited
The above article was created for Telegraph Financial Solutions, a member of The Telegraph Media Group. For more information on Telegraph Financial Solutions click here