Pros and Cons

Advantages and disadvantages of Equity Release

Equity release will make a substantial amount of cash available either as lump sum or regular income.
Products are available where no payments are required from you until your home is sold (other than the initial charges).
You remain in your home for the rest of your life if you wish.
Further cash can be taken by equity release later (depending on how much you take now).
You can usually still move home (subject to certain restrictions).

Equity release reduces the value of your estate, and the amount that will go to your beneficiaries on your death.
Equity release products involve borrowing against or selling all or part of your home. There may be more suitable methods of raising the funds you need.
Equity release schemes may work out more expensive in the long term than downsizing to a smaller property.
Equity release may affect your entitlement to means-tested benefits and grants.

You still own your home so all growth in the value (if any, of course) belongs to you.
Plans can be taken out when you are as young as 55.

The amount owed on the loan can mount up quickly.
Interest rates may be higher than for normal mortgages due to the long-term nature of the loan.
Further loans may not be available if you have already borrowed against a large part of the value, or if house prices were to fall.
If for some reason you wanted to repay the loan early, there may be early repayment charges.
If you live for a long time, or if house prices were to fall, there may be no equity left for your heirs to inherit.
Equity release can limit your options for moving house in the later years.

This advert refers to home reversion plans and lifetime mortgages. To understand the features and risks, ask for a personalised illustration.

You can choose how we are paid for mortgages: by commission (paid by the lender) and a fee of £350; or by a fee only, typically £800.

Unless you have sold 100% of your home, you continue to share in any growth in value.
Further cash advances may be possible depending on the percentage you have already sold.
You know the proportion of the value of your home that your beneficiaries will get.

These schemes can take longer to arrange, and some companies are selective about the properties they consider.
If you die shortly after starting the plan, you could have sold off a part of your home cheaply. Some schemes operate a rebate if death occurs within the first few years.
When you sell a part of your home, you do not get the full market value.