Equity Release Guide

Plans

Equity Release products give older homeowners a way to turn some of the value of their homes into cash - a lump sum, regular extra income, or sometimes a combination of both.

There are two popular types of Equity Release product:

• Lifetime Mortgage
• Home Reversion

Both Lifetime Mortgages and Home Reversion plans are ‘regulated’ by the Financial Services Authority (FSA). This means that a plan provider or a financial professional who is fully qualified to give advice on Equity Release, must only offer a plan if it is appropriate to your specific needs.

Lifetime Mortgage

A Lifetime Mortgage enables you to take out a mortgage against your property for part of its value, but unlike a traditional mortgage, no repayment of the mortgage is required during your lifetime. The interest on the Lifetime Mortgage is added to the initial amount loaned and is repaid when the property is sold upon death or when the property is vacated. An increasingly popular type of Lifetime Mortgage is a draw-down plan. This plan ‘reserves’ a pot of money, which you can draw upon as and when you need it.

The interest on the Lifetime Mortgage is added to the initial amount loaned and is repaid when the property is sold upon death or when the property is vacated.

An increasingly popular type of Lifetime Mortgage is a draw-down plan. This plan ‘reserves’ a pot of money, which you can draw upon as and when you need it.

• Benefits and Considerations of Lifetime Mortgages

Home Reversion

A Home Reversion plan enables you to sell all or part of your property to a company and continue to live in it as a tenant, usually rent-free, for the rest of your life, or when the property is vacated.

If the property and the Home Reversion plan are in joint names, the surviving partner will have the right to live there for the rest of their life or until the property is vacated.

• Benefits and Considerations of Home Reversion plans

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