What is equity
release?
Find out about the potential value held in your home and discover the full equity release process, as well as some of the reasons why you might seek to release equity.
In simple terms...
Equity release is the act of releasing money that is held in your property. It is one of several financial solutions that may be available to homeowners over the age of 55. The UK’s most popular equity release product is a Lifetime Mortgage, which allows you to access a portion of the money held in your home as a tax-free cash lump sum.
Why might you want to release equity?
Accessing some of the money tied up in your home can be a way to help fund your financial plans in retirement. Some of our existing customers have released equity to…
Gift an early inheritance
With a Lifetime Mortgage you could provide your loved ones with their inheritance now, when they need it most. This could help get your children onto the property ladder, pay for a grandchild’s education, or simply allow everyone to enjoy a higher quality of life.
Make home improvements
With a Lifetime Mortgage, you retain ownership of your property for life, or until you move into long-term care, and can be an alternative to downsizing for those who want to remain in the home they love. Money released from your home could enable you to make improvements that will ensure your home is right for you for life.
Clearing an existing mortgage
This is one of the most popular reasons for equity release. With a Lifetime Mortgage, the interest on the money you release will roll-up over time, rather than requiring monthly repayments. This may offer greater flexibility for homeowners who would like to have more control over repayments.
You are required to clear an existing mortgage on your property before releasing further equity, which can be achieved through existing savings or with the money that you release.
Top up a pension pot
Some homeowners reach retirement and realise that their pension will not allow them to maintain the quality of life they currently enjoy. By releasing some of the money held in your property, you could boost your income through retirement.
What is the process of releasing equity?
When choosing to release equity from your home, it is important to consider the benefits and risks, such as how a Lifetime Mortgage will impact you and your family.
Here are the steps you’ll need to follow to find out if equity release is the right option for you.
1. Receive quality advice
To release equity from your home, you are required to speak with a qualified financial adviser, who will assess your financial situation, consider a variety of solutions and help you to decide whether a Lifetime Mortgage may be an option for you.
2. Your Lifetime Mortgage illustration
If you agree that a Lifetime Mortgage is the right solution, your adviser will recommend a variety of plans based on your needs. One of the recommended products may be from the Royal London Equity Release product range, at which stage you will be provided with a Key Facts Illustration. This will explain the full terms of your Lifetime Mortgage and will provide an illustration of how your interest will roll up over the lifetime of your loan.
3. Application and valuation
If you are happy with the illustration provided, your adviser will make an application with us. We will instruct a local surveyor to conduct a valuation of your property and they will send a report to us for assessment.
4. Receiving your offer
Once we have completed all of our checks to ensure that the product is right for you, we will prepare and send out your Lifetime Mortgage offer. Our solicitors will be instructed, and they will work with your solicitors towards completion. Your solicitors and your adviser will guide you through this process and will set a date to sign the documentation.
5. Completion of your Lifetime Mortgage
A date will be set for the completion of your Lifetime Mortgage and we will release the funds to you via your solicitor, who will deposit your release into your nominated bank account.
Understanding how equity release will affect you
When you release equity from your property, the value of your estate will be reduced and it may affect your entitlement to means-tested benefits. Your adviser should give you a detailed illustration of how this will look for you.
To get an estimation of how your interest will roll-up and to find out how regular repayments may reduce this cost, use our equity release estimator.
Estimate now