How do I find the best equity release plan for me?
RELEASING equity from your home can be an exciting opportunity, whether you want to achieve goals such as travelling more or simply supplementing your finances to enhance your lifestyle.
With many different plans available from leading lenders, you may be wondering how to find the best equity release plan for your individual circumstances.
There are lots of plans available, so it’s important to do your research first and get advice.
Calculate how much you could unlock
Types of equity release
What makes a plan the ‘best’ will differ for everyone depending on your needs and objectives.
For some, this may be the lowest interest rate available, while for others, it could be more important to find a plan that has certain features and flexibilities.
It can be good to research the types of plans available before contacting an equity release advisor, however your advisor will take you through these in detail.
There are two main types of equity release plans: a lifetime mortgage and a home reversion plan.
A lifetime mortgage is secured against your property and any money released, plus accrued interest, is repaid upon death or moving into long-term care.
A home reversion plan involves selling all or part of your home, which you can continue living in until you die or move into long-term care.
It’s worth noting that both types of plans will reduce the value of your estate and impact funding long-term care.
Consider your objectives
Some aspects of equity release plans can be tailored to your specific individual circumstances, so it’s good to think about what you want your plan to look like.
What are you going to use the money for? Do you want to take this as a lump sum or smaller amounts over time?
Are you wanting to protect a portion of your estate to pass on as inheritance to family?
You can enjoy spending the money you release in a number of ways, providing any existing mortgage is first repaid with the money you release.
Some plans are portable, meaning you may be able to move to a different property as long as it suits the lender's requirements.
Whilst there’s no requirement to make regular repayments with equity release, as the money you release, plus accrued interest, is repaid when you die or move into long-term care, some plans allow voluntary repayments.
This could be helpful if you want to reduce the interest that accumulates over time, however, payments are subject to set limits and early repayment charges may apply above a set value.
An advisor will go through all these questions with you to help you find a plan that suits your situation and requirements.
More on equity release
Get advice from specialists
Calculate how much you could unlock
If you’ve decided you want to explore more about accessing the tax-free cash locked in your home, a sensible next step would be speaking to specialists in the equity release market.
Advice is required before proceeding with equity release as it is a big financial commitment, and advisors can help you find out if it’s right for you.
They will ask you questions such as how much you want to release and what you’d like the money for. This will help them understand your goals and needs to find the best plan for you.
They will also explore whether alternative options would be more suitable for equity release, such as downsizing or seeing if family could offer financial assistance.
Using the age of the youngest homeowner, your property value and latest lender plan availability details, they will help you find out how much you could release.
Alternatively, an online calculator can help you get an initial idea of how much you could release.
Find a reputable provider
A qualified equity release provider can help you decide if equity release is right for your needs, compare different lenders and products and ensure you understand the terms and conditions of your equity release deal.
Many advisors, such as those at , provide a free initial quotation with no obligation to proceed.
Only if your case completes would an advice fee of £1,895 be payable. Other lender and solicitor fees may apply.
Using the age of the youngest homeowner, your property value, and latest lender plan availability details, will help you find out how much you could release.
Alternatively, an online calculator can help you get an initial idea of how much you could release.
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