Don't fall for the myths about equity release - get the facts
Equity release has long been surrounded by numerous myths, such as it being unsafe or the possibility of losing your home. Although many UK homeowners could benefit from accessing their property wealth, many still hold misconceptions about what equity release is and how it works.
These myths have prevented many potential customers from considering equity release as a potential financial solution in later life. Royal London Equity Release Advisers is here to help you get to the truth.
Discover the truths
With a Lifetime Mortgage, the UK's most popular form of equity release, your home remains 100% your own. The no-negative equity guarantee ensures that you never owe more than the value of your home, protecting your loved ones from inheriting Lifetime Mortgage debt.
In addition, the amount you owe is only due for repayment after the last homeowner passes away or moves into permanent long-term care. This is usually done through the sale of the property. Your interest rate will be fixed throughout your plan, giving you complete clarity over the full cost. There are also a variety of features allowing you to tailor your release, meaning that Lifetime Mortgages represent an incredibly flexible type of borrowing for homeowners over the age of 55.
If you're over 55 and your home is worth £70,000 or more you could be eligible for equity release. Use Royal London Equity Release Advisers’ free calculator below to see how much tax-free cash you could unlock from your home!
These myths have prevented many potential customers from considering equity release as a potential financial solution in later life. Royal London Equity Release Advisers is here to help you get to the truth.
Discover the truths
With a Lifetime Mortgage, the UK's most popular form of equity release, your home remains 100% your own. The no-negative equity guarantee ensures that you never owe more than the value of your home, protecting your loved ones from inheriting Lifetime Mortgage debt.
In addition, the amount you owe is only due for repayment after the last homeowner passes away or moves into permanent long-term care. This is usually done through the sale of the property. Your interest rate will be fixed throughout your plan, giving you complete clarity over the full cost. There are also a variety of features allowing you to tailor your release, meaning that Lifetime Mortgages represent an incredibly flexible type of borrowing for homeowners over the age of 55.
If you're over 55 and your home is worth £70,000 or more you could be eligible for equity release. Use Royal London Equity Release Advisers’ free calculator below to see how much tax-free cash you could unlock from your home!
Free Equity Release Calculator
Find out how much you could release with the help of Royal London Equity Release Advisers! Equity release could be used to pay off existing mortgages, fund home improvements, and more.
5 facts about Lifetime Mortgages
- You still own the property - 100% of it.
- You will not have to pay back more than your home is worth.
- You can ring-fence a portion of your property value to pass on as an inheritance.
- You can choose to make optional repayments to reduce the amount that you owe.
- Equity release can be used to pay off existing mortgages, provided the full amount can be cleared with the release and from other sources, resulting in no more monthly repayments!
- The personal information collected will be used by Royal London Equity Release Advisers to respond to your request by telephone and/or email and post. Please view our privacy notice for more information on your rights and how Royal London Equity Release Advisers will use your personal information.
Your later life lending options
If you're a homeowner aged 55 or over, Royal London Equity Release Advisers can help to compare the different lending options that are available. Equity release with a Lifetime Mortgage can be a powerful financial tool. But there are a couple of other mortgages which are worth considering. We will work with you to find the best solution.
So, what are the options available?
1. Lifetime Mortgages
If you don't want to commit to required monthly repayments and don't want to pay off your loan in your lifetime, then a Lifetime Mortgage might be suitable for you.
2. Mortgages in retirement
If you're happy committing to monthly repayments, Retirement Interest-Only Mortgages or other traditional mortgages could also be the right choice for you.
Lifetime Mortgages
Equity release can allow eligible homeowners aged 55 or older, to access some of the money tied into the value of their property. The most common form of equity release is known as a Lifetime Mortgage, which enables you to access tax-free cash from your home whilst still maintaining full home ownership.
A Lifetime Mortgage is the UK's most popular form of equity release, as it allows UK homeowners to take advantage of their property wealth to fund their later life ambitions with the option to not make any repayments during their lifetime.
If you are over the age of 55, then you could be eligible to release tax-free capital from your home, whilst retaining full home ownership.
As payments made are entirely optional, Lifetime Mortgages do not come with the risk of repossession as a result of missing one. However, releasing equity with a Lifetime Mortgage will reduce the value of your estate and could affect your entitlement to means-tested benefits.
The amount that you can borrow depends on the value of your home and the age of the youngest homeowner on the deeds.
To be eligible the youngest homeowner must be aged 55 or over, and the property must be worth at least £70,000.
Based on your personal circumstances, Royal London Equity Release Advisers will help you decide upon the plan that best suits you.
There are a number of different types of Lifetime Mortgage, based on the way you release the funds and the flexible features that are right for you.
Lifetime Mortgages have no fixed end date. The mortgage balance is due for repayment once the last homeowner on the deeds has either passed away or entered into long-term care.
Typically this is achieved via the sale of the property.
Mortgages in retirement
If you are looking to make monthly payments, then one of a number of other mortgage products could be suitable for you, ranging from traditional mortgages to Retirement Interest-Only Mortgages.
The one that is best suited to you will depend on your personal circumstances. Your adviser will only recommend a product that works for both you and your loved ones. With these mortgages, you make a monthly payment. Do be aware that your home may be repossessed if you do not keep up repayments on your mortgage.
Whether you are looking to take out a new mortgage or to remortgage an existing loan, some traditional mortgages are still suitable for homeowners over the age of 55. Capital repayment and interest-only plans, as well as a mixture of the two, could be available. For this product type, you will have to show that you can afford the monthly payments both now and in the future. With the interest-only option, the balance of the mortgage will be due for repayment at the end of the term. The lender may specify a suitable method for you to repay the loan.
In contrast to Retirement Interest-Only Mortgages, these mortgages have a fixed end date. Often, you will have to repay by a certain age.
If you are over the age of 50, you could be eligible for a Retirement Interest-Only Mortgage (RIO). A RIO can be a great way for you to borrow into retirement but keep your monthly payments to a minimum. RIOs work in a very similar way to a traditional interest-only mortgage, where you only pay the interest each month. But, there is a key difference with a RIO.
It is typically not due for repayment until you have passed away or entered permanent long-term care.
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Got a question? Royal London Equity Release Advisers is here to help
0800 023 9314Free from UK landlines and mobiles. Mon to Fri: 9am-8pm. Sat: 9am-5pm.