Equity Release Plans

An Equity Release plan is becoming an increasingly popular way* for those over 55 (or in the case of joint applicants, both are over 55), to release some of the equity built up in their home without necessarily having to make monthly repayments. Under these plans you will be able to remain living in the property for as long as you or your partner wants.

* In 2007 SHIP members lent a record £1.21 billion, up from £851 million in 2002, an increase of 42%. (Source: SHIP Feb 2008 and June 2003).

There are two different types of Equity Release plans:

Lifetime Mortgages
Home Reversion Plans

Under Lifetime Mortgages there are different variations including :-

Lifetime roll up mortgages
With these Equity Release Plans you keep full ownership of your property but you obtain a secured loan, paid as either a lump sum or monthly income (or both), and you pay nothing back during your or the last survivor’s (if joint application) lifetime, or you finally give up owning a home whichever is the earlier. You are thus able to plan and enjoy your retirement more, safe in the knowledge that you no longer need to look at every penny you spend and that even though you don’t make any monthly repayments, the debt and the loan can never built up to such an extent that will ever leave your family or beneficiaries, a debt greater than your homes value. Likewise you can plan your retirement safe in the knowledge that you can still move home and either transfer the plan (subject to the new property being suitable) or pay off the plan with any equity generated from the move. To find out more about Lifetime Mortgages click here.

Interest Only Lifetime Mortgages
With these equity release plans you elect and will be required to make monthly repayments of interest for the duration of the mortgage to avoid the debt building up. There are a few Building Societies and Banks that are prepared to offer ordinary Interest Only Mortgages for life to retired people, to allow them to release capital. Interest Only Mortgages mean that you only repay the interest not the capital to the lender, therefore, the monthly repayments can be relatively affordable. To find out more about Lifetime Mortgages click here.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Home Income Plans
These equity release plans provide a lump sum which is automatically used to buy an annuity, and the income this generates is used to pay the monthly interest payments, plus provide a possible monthly surplus for you to enjoy as additional income. Whilst the fact that the interest is deducted from the annuity reduces the available income, it does have the advantage that the debt will not build up. To find out more about Home Income Plans click here.

All equity release plans involve borrowing against, or selling all or part of your home, and may work out more expensive in the long term than downsizing to a smaller property, and may affect your entitlement to State benefits and grants. There may be more suitable methods of raising the funds you need. We would be pleased to assess this before recommending a plan for you.

Which scheme is right for you will depend upon your individual circumstances. If you would like further advice please complete our online equity release enquiry form and one of our trained consultants will call you back shortly.

Alternatively please feel free to phone The equityRelease Centre on 0118 958 8810 or click through to our Equity Release Centre home page and follow the links from there.

You will always receive courteous service in the strictest confidence from highly trained staff who all value your custom. Your business will be dealt with in a friendly, efficient and personal manner at all times.

This advert refers to home reversion plans and lifetime mortgages . To understand the features and risks ask for a personalised illustration.