How Does It Work?

An equity release provider will consider your home to be worth its open market value minus any mortgage or other debt held against it. The amount you can release will also depend on factors such as your age and life expectancy.

There are two main types of equity release schemes available – lifetime mortgages and home reversions. Both options allow you to remain in your home and unlock cash to be used for whatever purpose you require.

Lifetime mortgage

• You borrow a lump sum of money or take an income at an agreed interest rate, or in exchange for a fixed charge.
• You will not normally make repayments on the money borrowed.
• The interest on your loan accrues and is only repaid - along with the total loan amount - once you die or move permanently into care. With some products you may be able to make interest repayments.
• You continue to own your home and to benefit from any increase in its value.

Many providers offer flexible lifetime mortgages that allow you to come back and borrow more money up to an amount that is agreed in advance with your lender. These plans are popular as you only start to accrue the interest on your loan from the day you receive the money. You do not usually have to pay anything extra for the facility to come back for more money in the future.  

Home reversion

• You sell a percentage share of your home in exchange for a lump sum or income
• There is no interest to pay because it is not a loan
• If your property increases in value you will only benefit from the increase on the proportion you still hold.

Just Retirement Solutions offers full financial advice on all types of equity release schemes from a range of leading providers. To find out more please contact us on: