Equity Release is a way to unlock tax-free cash from your home, even if you still have a mortgage. You can do this from age 55, and if it's right for you it can be a great way to give you access to some extra money. The way Equity Release works depends on the type of plan. There are a few different types.
Types of Equity Release
If you take out a loan through your Equity Release plan, the loan and any interest will be repaid after your death or if you enter long term care. Any type of Equity Release will reduce the money you have to leave behind as inheritance and could affect any means-tested benefits.
Type of Equity Release plan
How it works
You get a lump sum of tax-free cash as a loan, but continue to own your home. The loan is secured against the value of your property, and you’ll pay interest on it which will increase the total amount that needs repaid.
Just like a Lifetime Mortgage, you get tax-free cash as a loan that’s secured against your property. However, with this type of plan you have more flexibility. You can take the money as and when you like instead of in one big lump sum.
Just like a normal Lifetime Mortgage, you get a lump sum of tax-free cash and continue to own your home. However, with an Interest Only Lifetime Mortgage you can pay back some of the interest. If you pay back all the interest, the amount you owe will never go up.
With a Home Reversion Plan, you sell all or part of your property to release money from it. You keep living in your home, and won’t pay any rent to lenders.
How much tax-free cash can you release?
The amount of tax-free cash you can release depends on how much equity you have in your home. Equity is how much your home is worth minus any outstanding mortgage you still have to pay off. Here are a couple of examples:
- If your home is worth £250,000 and you have paid off your mortgage then you’ll have £250,000 equity
- If your home is worth £300,000 and you have a mortgage of £50,000 then you have £250,000 equity
The amount of equity you can release from your home will depend on a number of things from your age to your personal circumstances.
Though it’s worth noting you won’t be able to release the full value of your home.
You can use our free calculator to see how much you could release.
How much does Equity Release cost?
You have to take advice to release equity from your home. This has a cost and is usually a percentage of the money you release.
There can also be other costs in setting up your plan.
It's important to get advice
Releasing money from your home is a big decision, so you need to get advice to make sure it’s the right option for you, as there are other options open to you.
If you choose to go through us you can get initial advice for free from Age Partnership. There's no obligation to continue but if you decide to go ahead, the fee will be 2.25% of the amount of money you release from your home (minimum £1,695). This will come off the amount paid out to you, so you don’t need to send us any payment.
Age Partnership will pay Standard Life Client Management an introductory fee if you decide to take out a product. This will be based on a percentage of the product value. Please contact us if you require further information on this.
Try the Age Partnership Equity Release calculator
Simply fill in a few details and find out how much money you could unlock from your property.
Give us a call
We can take you through all you need to know and answer any questions you may have
What is Equity Release?
Equity Release is a way to unlock tax-free cash from your home.Learn more about your options >
What is a Lifetime Mortgage?
A Lifetime Mortgage is a type of Equity Release plan where you unlock money but continue to own your home.Find out how a Lifetime Mortgage works >
Standard Life Client Management Limited is registered in Scotland (SC193444) at 1 George Street, Edinburgh, EH2 2LL). Standard Life Client Management is authorised and regulated by the FCA. Its FCA register number is 435970. Age Partnership Limited (registered in England (5265969) at 2200 Century Way, Thorpe Park, Leeds, LS15 8ZB). Age Partnership is authorised and regulated by the Financial Conduct Authority. Their FCA register number is 425432