Equity Release

If you’re over the age of 55, equity release offers you a way to use the value of your home to raise money.

Introduction to equity release

Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.

It is advised that you seek Independent Legal advice before entering into a legally binding equity release contract.

Why do people consider equity release?

  • To provide an additional income
  • To provide lifetime gifts to relatives
  • For home improvements
  • For holiday home purchase
  • To fund long term care

You probably have other ideas – there is no restriction on how you use the funds.

However, since equity release can be an expensive way to raise money when taking into consideration payment of arrangement fees or interest, you should also consider the following:

  • Your Savings & Investments

If you have savings or investments you may wish to consider this alternative.

  • Benefits entitlement

Have you checked to see that you are getting all of the benefits you are entitled to? It may be that you are entitle to benefits that make equity release unnecessary.

Also equity release could affect your entitlement to means-tested benefits so it’s worth speaking to your local authorities to consider these areas first. They may be able to offer you grants or assistance with essential home improvements and alterations that you would otherwise pay for yourself.

  • A smaller home

If your family have grown up and they are off on their own financial journey now, your current home may be too big for your needs and you could consider something smaller and more economical to run. In this case, you could consider purchasing a smaller property, leaving you with a lump sum on completion.

  • Rent out a room

If your house is sufficiently large you might consider renting out a room to bring in regular extra income.

  • Sell your home and live in rented accommodation

This option involves selling your house and investing the proceeds in income producing investments. The income from these investments is then used to rent a property and for your living expenses. You would only really be able to generate sufficient income to live


Click here to find out about the different types of Equity Release

Costs of Equity Release

Take into consideration that when entering into any type of equity release scheme there will be set up costs and ongoing costs which can include:

  1. Arrangement Fees payable to the lender
  2. Legal Fees
  3. Valuation Fees
  4. Maintenance costs – you are still responsible for maintenance of the property
  5. Insurance costs – maintaining adequate buildings insurance