The equity in your mortgaged property is the difference between the value of your home and the total of the mortgage and any loans that you have secured on it. Equity release is an agreement allowing you (without leaving your home) to release a lump sum payment, regular smaller payments, or both. To be eligible you normally need to be at least 55 years old.
How equity release can help
If you want to repay an existing mortgage, increase your income, pay for care needs or clear debts, equity release may be a useful option.
Will equity release affect my benefits and tax?
Your income related benefit entitlement can be affected if you use your equity release to clear your debts and you may still be treated as having the money, even after you have used it to pay your debts off. It is essential to inform the Department for Work and Pensions (DWP) or local authority about the money you receive from equity release. You will need to check how releasing equity will affect your personal tax position, but you don’t usually have to pay tax on equity you release from your main home.
Equity Release Schemes
Rules regarding Equity Release
Equity Release Council
Equity Release Council product standards
The following are examples of the different fees you are likely to be charged for when entering into an equity release agreement.
A fee when you have your property surveyed
An application fee
Advantages of Equity Release
Disadvantages of Equity Release
Equity Release Calculators
You may be tempted to use a website that uses an equity release calculators. You normally have to provide your personal details before they give you further information and they may then pass your information on to other organisations who may then contact you to try and sell you unsuitable equity release products.
Consider other options
Independent Financial Advice
If you have a complaint about a financial adviser or an equity release provider, ask for a copy of their complaints procedure. You should make your complaint in writing and if you are unhappy with their response, or if your complaint has not been resolved after eight weeks, contact the Financial Ombudsman Service.