Equity release can offer a way for homeowners to access the value of their property without having to sell it.
This can be can be particularly beneficial for those facing financial challenges during retirement.
This can provide additional funds to support retirement living expenses, repay debts, or fulfill other financial needs. There are primarily two types of equity release products: home reversion schemes and lifetime mortgages.
Home Reversion Schemes
Homeowners sell part or all of their property to an equity release provider at a discounted price.
The homeowners can continue to live in the property as long as they wish, often without paying rent.
When the property is eventually sold (usually upon the homeowner's passing or moving into long-term care), the provider receives their share of the sale proceeds.
Home reversion products have become less popular due to the growth of enhanced lifetime mortgages, which offer more flexibility and competitive rates.
Lifetime Mortgages
Lifetime mortgages are the more prevalent type of equity release product.
They allow homeowners to borrow against the value of their property while retaining ownership.
The borrowed amount, plus accrued interest, is repaid when the homeowner passes away or enters long-term care, usually through the sale of the property.
Lifetime mortgages come in different forms, including lump sum and drawdown options.
Equity release can be a complex financial decision, and it's essential to seek professional advice from a qualified financial advisor before proceeding.
We will explain the available options, and guide you toward the most suitable solution for your retirement income needs.
