Lifetime mortgages – for those aged 55+

This is the most popular form of equity release. Here you borrow some of your home's value at a fixed or capped interest rate. You can either take the money all at once in a lump sum, or you can take it in smaller chunks as and when you need it – something known as drawdown.

 

If you don't make any repayments then the interest will compound rapidly, as the amount you owe is increasing all the time. These days however, most lifetime mortgages do allow you to make repayments, be that repayment of the capital or just the interest, meaning you can reduce the overall cost.

 

If You (and your partner, if you’ve taken it out jointly) pass away or need to go into long-term care, subject to terms and conditions, the loan and any interest that’s built up is paid back – normally using money from selling your home.

 

This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration

 

Do involve your loved ones in the process

As an equity release plan doesn't need repaying until you die, or move into long-term care or until you sell the property, it's likely your loved ones will have to sort out the final repayment. Therefore, you should consider involving them during the application process as well.

 

Be aware that equity releasing can affect your benefits

Having cash rather than a property can affect the benefits you're entitled to, for example, pension credit, universal credit and others. So, if you're entitled to those, check the impact of equity releasing first. If you're unsure, ask an equity release adviser to check what the impact would be.

 

You need to know that taking out any type of equity release means you will leave a lower amount behind to loved ones and may not be suitable for everyone.