Equity Release

Home Mortgage Matters Equity Release

Equity release allows UK homeowners over the age of 55 to unlock part of the financial value in their home for various reasons, usually to help manage finances in later life. This can provide money to spend while the homeowners are still fit and healthy, or to help fund a particular purchase like a holiday home, or to give a living inheritance for loved ones.

The reasons for using equity release are many and varied and include:

  • Boosting retirement income
  • Helping children and grandchildren financially
  • Undertaking home improvements
  • Paying off an interest only mortgage
  • Funding your lifestyle

Our independent financial advisers will help you understand if equity release is right for you and let you know how much equity you could release from your home.

What are your options?

There are two main ways to take the money, either as a lump sum or as a draw down. A lump sum is where you take a payment of equity in one go. Whilst drawdown allows you to take a set amount as and when you need it or in regular amounts.

Lifetime mortgage

With a lifetime mortgage you take out a mortgage secured on your property provided it is your main residence, whilst you retain ownership. This option allows you to ring fence some of the value of the 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 move into long term care.

Home Reversion Plan

This option allows you to sell part of 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. You are responsible for insuring and maintaining the property during this time. You can ring fence a percentage of your property for later use for inheritance and this percentage remains the same regardless of the change in property values unless you decide to take further cash releases. At the end of the plan the property is sold and the proceeds are shared according to the remaining proportions of ownership.

Equity Release is not for everyone, so it's important to understand the benefits and what you need to consider.

Advantages of Equity Release

  • Get a tax free cash lump sum
  • The tax-free cash can be taken as either a lump sum or you can ‘draw down’ the money as income depending on the option you choose
  • You still own 100% of your home with a Lifetime Mortgage
  • If you pay off your current mortgage with the lump sum, you can choose to spend the remaining cash on what you want

Things to consider

  • The money you release is paid back after you die, from your estate. This means that the overall size of your estate and the amount you are able to pass on to loved ones, could go down.
  • The money you release from your home is a loan and interest will need to be paid when you die or if you move into long-term care.
  • The money you release from your home could affect any means-tested benefits you’re entitled to now or in the future.
  • You have to take advice to release equity from your home.

Is releasing equity the right option for you?

This very much depends on your personal circumstances, such as:

  • Your age
  • Your income
  • How much money you want to release
  • Your plans for the future

Want to find out more?

If you think that equity release might be for you then please speak with one of our independent advisers.

Both options have advantages and disadvantages and whilst it is tempting, it’s important not to focus solely on the immediate boost you will get from the money you release, you also need to look at how it will affect your future choices and financial situation in later life.

It is therefore important to take impartial independent financial advice from an equity release approved adviser. At TFA we have a number of advisers who will be able to advise you and who have access to the whole of the market to ensure they source the correct product for your needs. To understand the risks and features please ask for a personalised illustration.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

To get a personalised illustration please arrange an appointment with one of our advisers either face to face or on the phone or by a video call via the details below.

To find out more, please contact us on 0800 389 9708 or email enquiries@tfagroup.co.uk or use our Let's Chat function

Your home may be repossessed if you do not keep up repayment on your mortgage.

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