Equity release is a way of unlocking money tied up in the value of your home without having to move out. It allows homeowners, usually older adults, to access a lump sum or regular income by either taking a lifetime mortgage (a loan secured on the home) or a home reversion plan (selling part or all of the property's equity while continuing to live in it). The homeowner continues living in the property, and the loan or sale is repaid when the property is eventually sold, typically after the homeowner passes away or moves into long- term care.

How Equity Release Works

• Lifetime Mortgage: You take a loan against your home value, which does not require monthly repayments. Interest accumulates on the amount borrowed until you die or move into long-term care. Your estate repays the loan from the sale proceeds of the property, and you never owe more than the value of the home.
• Home Reversion Plan: You sell a percentage of your home to a provider for a lump sum or income. You keep the right to live in the home rent-free, but you own less of it. When the home is sold, the provider takes their share of the sale proceeds.

Key Points

• It is not a traditional mortgage but a long-term financial agreement.
• Equity release reduces the amount of inheritance you leave behind.
• There are upfront fees, ongoing service fees, and potentially fees to end the agreement.
• The product suitability depends on age (usually 50+ or 55+), home value, and other criteria.
• Professional advice is strongly recommended as it affects benefits, taxes, and inheritance.

Equity release provides access to cash for home improvements, supplementing retirement income, or other expenses while letting homeowners stay in their homes.