Equity release guides

Find out what equity release is, how it works and important things to consider before applying

What is equity release?

Equity release is a way of unlocking some of the wealth tied up in your property, without having to sell your home. For some, it can be a useful way to raise cash to pay off debts, clear an existing mortgage, boost retirement income, or help out family.

However, equity release has its drawbacks and can have a significant long term financial impact on your wealth – it is certainly not suitable for everyone. Our guide is here to help you understand what equity release is and how it works, to help you make an informed decision.

What are the risks of equity release?

Equity release is a significant financial decision that needs to be thought through carefully.

In the guides below, we’ll cover the risks and pitfalls, as well as what you should ask yourself before considering equity release as an option.

Looking for equity release help?

If you’re looking for somewhere to start, you can get fee-free expert advice from a Rest Less Mortgages equity release specialist, with no broker fees on application. They are active members of the ERC and can advise on equity release mortgages from the whole of the market. They’ll listen to your needs and talk you through your options, so you can decide if equity release is the right option for you.

Am I eligible for equity release?

Equity release is not available to everyone and there is a range of eligibility criteria that must be met before you can access an equity release product. For instance, the minimum age for being able to access equity release is 55 and there are a number of restrictions on the type of property that might be eligible.

Find out more about who can access equity release and the eligibility criteria involved.

Types of equity release

With a growing range of mortgage and equity release options available for borrowers aged 55 and up, it’s not always easy to work out which one might be right for you. In our article, we explain how retirement interest-only mortgages and lifetime mortgages work and examine their similarities and differences, to help you decide whether either option might be worth considering.

We also dive deep into the two types of equity release: lifetime mortgages and home reversion below.

Lifetime mortgages

Lifetime mortgages are by far the most popular type of equity release plan in the UK. This is where you take out a mortgage secured on your home, which does not need to be repaid until you die or go into long-term care. Unlike home reversion, with lifetime mortgages you’ll retain ownership of your property. If you want to see how much it’s likely to cost you, our lifetime mortgage calculator can help.

Home reversion

Home reversion involves selling a percentage of your property to an equity release provider, in return for a cash lump sum or a regular income. You’ll have the right to continue living in your home rent-free until you die or go into long-term care. Once that happens, your property will be sold and the proceeds divided between you and the equity release provider in proportion to the equity they own.

How much does equity release cost?

As you might expect, the costs associated with taking out an equity release product can vary widely depending on a number of key factors. The single biggest cost is almost always the interest you will end up owing on the amount you borrow.

In this guide, we cover the costs involved in equity release, how to reduce them, and where to get help and advice.

See how much you could unlock from your home with this free, easy to use calculator. Fill in a few details to get an estimate – and if you’d like some advice, arrange to speak to an expert.

Alternatives to equity release

Taking out an equity release product is a big financial decision and it may not be your only option. Before committing to any particular course of action, it can be helpful to consider if there are any other potential alternatives that might help you achieve what you need.

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