Equity release plans – also called lifetime mortgages, home reversion or home income plans – are a way of releasing cash. These schemes essentially allow you to borrow money against the value of your home, with the debt being repaid from the sale proceeds after your death.
How equity release plans work
While there are a range of different schemes offering lump sums and/or regular income, they all work on the same principle: they lend you a part of your home’s value in return for a share of the proceeds when you die.
In most cases you will need to be at least 60 years old, have no outstanding mortgage (or you will need to use the equity release money to pay down the existing loan), and own a property in reasonable condition.
Equity release plans can be complicated products and are a major step for many people. Your house is almost certainly the most expensive asset you own; it is also your home. Good advice is essential.
Age UK (previously Age Concern) and the Financial Services Authority, the UK’s chief financial watchdog, both recommend getting independent financial and legal advice before proceeding.
We can give you the legal advice that is so very important.
