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Types of Equity Release

Lifetime Mortgages

A lifetime mortgage is a type of mortgage where you choose to extract your fund through a single lump sum or in smaller amounts over time, to the maximum limit agreed with the provider.

With a lifetime mortgage you can elect to retain some of the value of the property as an inheritance for family members.

By choosing a lifetime mortgage, you retain full ownership of your home and the interest on the loan can be fixed or rolled up. The loan and rolled up interest is repaid by your estate when you die or move into long-term care on a permanent basis. For a couple it would be based on the last to survive.

Lifetime mortgages can offer the ability to make monthly interest payments in part or full, therefore maintaining the debt to the minimum amount before interest.

The amount eleased depends on your age and the value of the property. Some providers are able to offer larger sums to those with certain past or present medical conditions, or lifestyle factors such as smoking.

Home Reversion Plans

A home reversion plan allows you to access all, or part, of the value of your property while retaining the right to remain in it, rent free. With home reversion, the provider will purchase all, or a percentage, of your house.

You will understand precisely what portion of the property you have parted with and what has been ring-fenced for later use. The percentage you retain in your property always remains the same, regardless of the change in property value, unless you decide to take further cash releases.

At the end of the plan your property is sold and the sale proceeds according to the remaining proportions of ownership.

Like lifetime mortgages, you may be able to access more funds, depending on your age and medical conditions. You will be provided with a tax-free cash lump sum or regular payments, and a lifetime lease guaranteeing you the right to stay in your property rentfree for the rest of your life. There would be no day-today interference and no estrictions in treating the house exactly as before, as a private home to live in freely.

Guide to Equity Release Download

Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.