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Equity release mortgages

Find the right equity release plan with Fluent Mortgages

  • Direct access to experienced advisers
  • Find out how equity release plans work
  • Understand the pros and cons
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What does equity release mean?

Equity release is the process whereby you access some or all the wealth that is tied up in your home

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How does equity release work?

You get tax-free cash via a mortgage or by selling an interest in your home but continue to live there

What are the types of equity release mortgages?
 

There are two main types of equity release plan, so it’s important to consider which might be better for you.

You will need to take expert advice before entering into an equity release arrangement.

  1. Lifetime mortgage 

    When you take out a mortgage against the value of your property, with the debt repaid when it’s sold if you move (for example, into permanent care) or after your death

  2. Home reversion 

    When you sell part of your home for a cash sum and continue to live there, with the property being sold if you move (for example, into permanent care) or after your death
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What can you use equity release cash for?

There are no restrictions on how you can spend the proceeds of equity release:

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Supplement your pension

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Adapt your accommodation

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Pay for a holiday

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Clear your mortgage

What are the advantages and disadvantages of equity release?

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    Pros

    Release wealth from your property

    No restrictions of how you use the cash

    Stay in your home until you die or choose to move

    Choose from a range of plans

    Might help reduce inheritance tax liability

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    Cons

    Could reduce how much you can leave in your will

    Might affect your entitlement to benefits

    Possible restrictions on adapting your home

    You are likely to incur substantial arrangement fees

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Who are Fluent Mortgages?

To ensure you get the right equity release mortgage for you, MoneySuperMarket have partnered with Fluent Mortgages and their expert equity release advisors.

Fluent will need to speak to you regarding your requirements. 

You can contact them here or call 01204 899581.

You can use an equity release product to release cash from the value of your home. Be aware that boosting your available wealth in this way may affect your entitlement to means-tested benefits.

If you are considering equity release, it is important to discuss matters with your family, especially if you intend to make them beneficiaries of your will. You must also take professional advice.

An equity release plan will reduce the value of your estate, so telling your family about your plans will avoid any nasty surprises further down the line.

There are two types of equity release plan: lifetime mortgages and home reversions. For most lifetime mortgages on the market you must be at least 55 to be considered, while for most home reversion plans you must be at least 65.

For couples, both individuals must have reached these ages.

A lifetime mortgage is when you borrow against the value of your home. You retain ownership of the property and can continue to live in it until you die or move into permanent care (this applies to the second person in a couple). At this point the property is sold and the mortgage repaid. 

With some lifetime mortgages, mortgage interest is added to the capital debt and rolled up. With others, you can make monthly payments to clear the interest as you go.

With a home reversion, you sell a portion of your home for a price below the market value. When you die or move into permanent care (this applies to the second person in a couple), the property is sold, and the proceeds are divided between you/ your estate and the plan provider.

If your home is worth £300,000 and you decide to sell 30% (£90,000 worth) via a home reversion, the plan provider may agree to pay you, say, £50,000.

When the property is sold, the company is entitled to 30% of the sale price. If the house has increased in value to £400,000, it will receive £120,000. If the property has fallen in value to £200,000, it will receive £60,000

Yes. Lifetime mortgages and home reversion plans are regulated by the Financial Conduct Authority, as are the companies that offer them. 

Most (over 90%) of the companies in the equity release sector belong to the Equity Release Council, which promotes high standards of professional practice among its membership.

Members of the Equity Release Council, which represents around 90% of the market, attach a ‘no negative equity’ guarantee to the plans they sell. This means that, if the value of the property falls below the level of the debt, the company takes the hit and won’t pursue you or your estate for the shortfall.

Boosting the amount of cash you have could affect your entitlement to means-tested benefits such as the pension credit and universal credit. It is important to work out how you might be affected before you take the plunge with equity release.

Let your family know what arrangements you make regarding your home

Always take expert advice before committing to an equity release plan

Make sure your equity release plan has a ‘no negative equity’ guarantee

Check to see whether your entitlement to state benefits will be affected

There are no restrictions on how you can spend the money you raise

There may be restrictions on the type of work you can have done to your home

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So how do we make our money? In a nutshell, when you use us to buy a product, we get a reward from the company you’re buying from.

But you might have other questions. Do we provide access to all the companies operating in a given market? Do we have commercial relationships or ownership ties that might make us feature one company above another?

We commit to providing you with clear and informative answers on all points such as this, so we have gathered the relevant information on this page.