Equity Release

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Equity release mortgage schemes allow you to utilise the equity you have built up in your home. There are essentially three types of equity release scheme available at present, however there are new schemes being developed all the time.

Innovation in this area has meant that equity release schemes are becoming more flexible. Many now allow regular drawdowns rather than just a lump sum to allow you to top up your income on a regular basis and as you only pay interest once the money has been drawn down, the debt rolls up more slowly.

For example, a lifetime mortgage would release a lump sum of £5,000 to pay for that once in a lifetime world trip, and then release £500 each month to supplement your pension income. No interest is payable on a monthly basis and as you only release a relatively small lump sum initially and a small amount each month, the interest rolls up much more slowly over time than if you released a large lump sum up front. This leaves more of the equity in place when you do decide to sell.

All the schemes recommended subscribe to the Safe Home Income Plan (SHIP) code of practice, also known as the Equity Release Council (ERC) providing a range of measures and safeguards to protect customers.

To understand the features and risks, ask for a personalised illustration. You should also take advice from your solicitor.