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Equity release

We’ve partnered with Responsible Equity Release to offer Lifetime Mortgages approved by the Equity Release Council.

We’ve partnered with Responsible Equity Release to offer Lifetime Mortgages approved by the Equity Release Council.

We’ve partnered with Responsible Equity Release to offer Lifetime Mortgages approved by the Equity Release Council.

We’ve partnered with Responsible Equity Release to offer Lifetime Mortgages approved by the Equity Release Council.

We’ve partnered with Responsible Equity Release to offer Lifetime Mortgages approved by the Equity Release Council.

What is equity release and how does it work?

Equity release is a way of using your home to generate income – without having to downsize. It works by allowing you to unlock the equity in your home in the form of a tax-free payment or payments.
 
You can use the money for anything from gifting an early inheritance to clearing an existing mortgage. And the money doesn’t need to be paid back until the last homeowner on the deeds dies or goes into long-term residential care.
 
If you have a beloved family home you don’t want to sell – but you need more money for your retirement, for example – equity release could work for you.

Frequently asked questions

What is a Lifetime Mortgage?

A Lifetime Mortgage is the most common type of equity release scheme. With a Lifetime Mortgage, you continue to own your home while borrowing money secured against it.
 
Lifetime Mortgages are designed to run for your lifetime with no monthly repayments. Interest is charged on the amount you release and this is usually fixed for life.
 
There are three types of Lifetime Mortgage:

  • The roll-up: you get a one-off, tax-free lump sum from your home. You don’t make regular repayments, but the interest is added to the loan. This, along with the initial loan, will be repaid when your home is sold.
  • The drawdown: you agree the total sum you can borrow with the equity release provider. You then take a lump sum and can draw down further funds in stages.
  • The flexible Lifetime Mortgage: this is like a roll-up plan, except that you can make voluntary repayments. You can usually repay up to 10% of the initial amount borrowed each year without any early repayment penalties. 

Who qualifies for equity release?

You may be eligible for equity release in the form of a lifetime mortgage if:

  • You’re a homeowner over the age of 55
  • Your home is worth at least £70,000
  • Your home is in reasonable condition
  • The home you want to release equity from is your permanent main residence and lived in by you for over six months of the year
  • You own the home you want to release equity from.

Can I sell my home if I have equity release?

If you have equity release, you can still sell your home. Lifetime Mortgages are portable so you can move home as long as the new home you choose meets the scheme’s lending criteria.

What are the benefits of equity release?

Equity release has a number of benefits:

  • You can stay in the home for life or until moving into long-term residential care.
  • You get the financial freedom offered by a lump sum or regular payments, or both.
  • Unlike a regular mortgage, there are no monthly payments to be made.
  • You won’t have to repay the loan until the last homeowner on the deeds dies or goes into care.
  • Lifetime Mortgages often offer a no-negative equity guarantee. All the Lifetime Mortgages available through Compare the Market’s partner, Responsible Equity Release, are from Equity Release Council approved lenders so will have this guarantee. You will have peace of mind knowing your loved ones will never inherit any Lifetime Mortgage debt.

What are the disadvantages of equity release?

There are downsides to equity release:

  • As you’re accessing some of the value of your property, there will be less left for your estate when you die. So it might affect what you can leave as an inheritance. However, plans are available that help you control the effects on your estate.
  • Releasing equity could affect your entitlement to means-tested benefits and help from your local authority.
  • The lender will require your home to be in good condition, so you’ll need to be able to pay to keep it this way.

Is equity release safe?

Equity Release is regulated by the Financial Conduct Authority (FCA). Plus, the Equity Release Council has a code of conduct for safeguarding customers that goes over and above FCA Regulations.
 
All Lifetime Mortgages offered by Compare the Market’s FCA-authorised equity release partner Responsible Equity Release are from lenders approved by the Equity Release Council. 

What is a Home Reversion Plan?

A Home Reversion Plan is a type of equity release, but it works in a different way from a Lifetime Mortgage and is most suitable for people aged over 70.
 
With a Home Reversion Plan, you continue to live in your home but you sell part or all of it to the reversion company. You then get a regular income and/or a tax-free lump sum. When your home is sold, the reversion company will take its share of the proceeds.
 
You don’t pay any rent but you won’t get the full market value of your house. The price you get will depend on your health and your age.
 
If you’d like advice on a Home Reversion Plan, you can find a qualified adviser at unbiased.co.uk.
 
Compare the Market’s equity release partner Responsible Equity Release don’t advise on Home Reversion Plans.

Can I get an equity release mortgage through Compare the Market?

We work with Responsible Equity Release. They’re FCA-registered and members of the Equity Release Council. Their network of fully trained, specialist advisers can help you find the right Lifetime Mortgage for you.

Looking for equity release advice?

All providers offering equity release products must give you advice, ensure that equity release is right for you and that the products suggested are suitable for your needs and circumstances. Equity release advisers must be appropriately qualified.

We’ve partnered with Responsible Equity Release to offer Lifetime Mortgages approved by the Equity Release Council. 

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