Equity Release


This is a Lifetime Mortgage. To understand the features and risks, ask for a personalised illustration.

A Lifetime Mortgage will reduce the value of your estate, will not be suitable for everyone and may affect your entitlement to state benefits.

Lifetime mortgages also known as Equity Release are a popular means for homeowners over 55 to unlock some of the value in their homes. Thousands of people in the UK already choose this method to supplement their retirement income.

Popular reasons for equity release

  • Home and garden improvements 63% of equity release customers in 2016 used some or all of the funds released to improve their home or garden. Such improvements include upgrading kitchens and bathrooms, building conservatories and extensions, or adapting homes and gardens to make them more manageable in retirement.
  • Helping your family Many clients may want to help their families financially. This could be helping children or grandchildren on to the property ladder, helping to facilitate a business venture or supporting them through education.
  • Help with regular bills With increasing life expectancy and constant pressures on state pensions, equity release could help supplement retirement finances to continue retirement in comfort and assist with everyday bills.
  • Clearing outstanding debt or existing mortgage Facing retirement with outstanding debt can be a worrying prospect. Equity release could be a way to release funds from your property in order to pay off any existing debt or a remaining mortgage, giving peace of mind in retirement
  • Going on holiday Many people fantasise about the holiday they’ve always dreamed of or a faraway holiday home. Clients can use some or all of the funds released to make that dream a reality.
  • Helping with the cost of divorce Going through divorce is a stressful time for anyone without the added pressure of financial worries. The industry is seeing divorcees releasing cash from their homes to assist with fees, to adjust to their new financial situation and helping to purchase a new property.

A lifetime mortgage is a way of borrowing an amount of money against the value of your home in the form of a long-term loan and without the need to move. You continue to own your own home, for the duration of the plan and as long as you are living in it – you’ll also be responsible for keeping your home in good repair. The loan is paid back using the proceeds from sale of your property and this is usually when you die or have moved into permanent long-term care.

The money released can be used for whatever you wish (so long as any outstanding mortgage has been paid off). You should be aware that taking out a lifetime mortgage could reduce your eligibility to means-tested benefits and could affect your tax position.

The interest is added to the loan and as such there may be no value left in your home at the end of the plan. Taking out a lifetime mortgage may also reduce the options that you have for moving or selling your home.

Before you think about equity release, you should also consider your other options because there may be more suitable methods of raising the funds you need. Moving to a smaller property or one of a lower value will give you the maximum value from your home. You may also have other savings and assets that could help fund your retirement.

Equity release schemes may work out more expensive in the long term than downsizing to a smaller property.

This is a lifetime mortgage/home reversion plan. To understand the features and risks, ask for a personalised illustration.

You will need to take legal advice before releasing equity from your home as Lifetime Mortgages and Home Reversion plans are not right for everyone.


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    This article is intended to provide a general appreciation of the topic and it is not advice.

    For more information please contact Oakwood on 01483 266666 or email enquiries@oakwoodms.co.uk and we will be happy to assist you.

    Article expiry: 05 Apr 2019

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