If you own your own home, equity release lets you access the equity (money), tied up between your four walls. You can take the money you release as a lump sum, in regular smaller amounts or a combination of both.
The money released from your home can be used for whatever purpose you like, from consolidating debts to home improvements, perhaps you’ve been looking at a new car or once in a lifetime trip – the choice is yours.
The most popular type of equity release. A lifetime mortgage lets you take out a loan, secured against your home whilst still owning it. Some providers will only offer this type of equity release.
You can sell all, or just a part of your property, usually between 20% and 60% of the market value. You can then stay in your home as a tenant, potentially rent-free.
You must own the property and it be your main residence. For a lifetime mortgage, you also need to be at least 55 years old; for a home reversion plan you must be at least 65 years old.
Most providers suggest between 6 and 8 weeks depending on the type of equity release you apply for. During this time an independent valuation will also be conducted.
Equity release is fully regulated by the Financial Conduct Authority (FCA). The Equity Release Council (ERC) also have a code of conduct that exceeds FCA regulations.
Equity release isn’t for everybody, if you’re looking to raise some cash downsizing, renting out or re-mortgaging your home may be a more suitable solution.
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