Equity launch is a way to help enhance your funds in later life by unlocking some of your house’s value.

Your property’s value, minus any outstanding mortgage or loans secured towards it, is its equity. This equity is usually passed on as an inheritance; nevertheless, through equity launch, you’ll be able to access some of your property’s price tax free.

Our equity release products are available for houseowners aged fifty five-84 whose property is price a minimum of £99,000. Nevertheless, not all equity launch plans work the same. This web page is here to assist make the differences clear so you possibly can make the fitting resolution to your circumstances.

How does equity release work?

The type of equity launch you choose will determine how it works. The commonest form is a lifetime mortgage; of which there are types – lump sum and drawdown. We’ll go right into a bit more element on these below.

The opposite form of equity launch is a house reversion plan. Home reversion plans are different to a lifetime mortgage. With a home reversion plan you will sell part or your whole dwelling to the home reversion firm at less than its market value. In exchange you will obtain a tax-free lump sum. You will now not own your own home, although you’ve the suitable to live there rent free.

However the principle premise of a lifetime mortgage is that it may permit you access to at the least £10,000 in tax-free cash by securing a loan in opposition to your property. Nevertheless, unlike most different secured loans, there are typically no monthly repayments for you to make – unless you choose to.

That’s because the loan, plus compound curiosity, is repaid when your plan ends, which is usually when the final remaining applicant either enters lengthy-time period care or passes away. Which means you could possibly access 1000’s of kilos in tax-free cash to help increase your later life finances without the concern of budgeting for repayments.

How much you could release will depend on a number of completely different things, including the worth of your property, any outstanding loans or mortgage secured towards it, and your age.

Usually, the older you might be, the more you’re able to release. However bear in mind, if it’s a joint application, the age relies on the youngest applicant, relatively than the oldest.

It’s also vital to note that if you have an present mortgage or some other secured loans against your property, they’ll must be paid off first. You need to use the money you release to do that – but doing so will reduce the quantity it’s important to spend on other things.