Equity Release-UK

Equity Release-UK

Equity release UK refers to mortgage products that enable individuals over the age of 55 to retain residency in their own home, in addition to obtaining a cash sum by securing a loan against their property’s value. In return, an equity release-UK mortgage provider is entitled to seek a full repayment of the mortgage, including accrued interest rates. Alternatively, the equity release-UK provider may be entitled to a share in the plan holder’s property. Our team of specialist advisers aim to seek an equity release-UK mortgage plan, which is appropriate and beneficial to the needs of the client.


An equity release-UK arrangement comes to an end in the event that the borrower dies, or is moved to a care home permanently. Equity release-UK schemes consist of two different plans; lifetime mortgage equity release plans and home reversion plans.

A lifetime mortgage equity release-UK scheme works by securing a loan on the borrower’s home. Interest is totalled up during the term of the mortgage, which may be repaid via monthly instalments (interest only lifetime mortgage), calculated month to month and paid along with the sum of the debt when the contract expires (rollover interest lifetime mortgage), or the interest and mortgage is paid monthly (home income plan).

However, money raised from the lifetime mortgage equity release scheme will be a relatively minute proportion compared to the value of the property. Furthermore, high interest rates would encourage an increased build up of debts, deteriorating equity within the estate. This will affect the eventual legacy of the borrower, such as their children. Younger borrowers are likely to be even more affected. Due to the fact they will have a higher life expectancy; younger clients are likely to see a high level of rolled up interest. Our expert advisers are focused in understanding and offering the most sensible equity release-UK scheme option for the individual.

Lifetime mortgage equity release-UK products may be suitable to some clients, as the property is not sold by the borrower, allowing some equity to remain in the estate, which the inheritors are able to benefit from. Also, no monthly payments are necessary, so the borrower can use the money as they wish. However, as interest rates are variable, on some schemes rates may rise, therefore causing a build up of interest. This will be added onto the total debt, hence reducing the amount of equity left within the estate.

Another equity release-UK mortgage plan is the home reversion plan. When a home reversion is arranged, the equity release-UK provider retains ownership of the house, or at least obtains a share in the borrower’s property. In exchange for this, the borrower receives a cash lump and is guaranteed lifetime occupancy in their home for the remainder of their life. The provider is authorised to sell the property, subsequent to the termination of the home reversion agreement. In a full home reversion plan, the provider gains full profit from the sale of the house, whilst the legacy of the borrower is entitled to a share of the proceeds under a part home reversion plan.

Home reversion schemes may be convenient to some clients as a higher proportion of cash is offered to the borrower, in comparison to the quantity generated with a lifetime mortgage equity release. In addition, the borrower is rewarded with residency for the remainder of their life, so they do not need to worry about relocating. On the contrary, home reversion equity release plans consequent in the borrower losing ownership to their property. This could be a psychological problem as individuals may find it difficult as that they will not be able to leave the residence for their beneficiaries.

Individuals must consider alternative options they have before enquiring for an equity release-UK mortgage. Arranging an inappropriate scheme can influence future plans, and may also leave the individual with unnecessary debt. Our goal is to work out the most convenient equity release-UK scheme for our clients, based on the client’s financial needs and requirements.

If you are interested in organising an equity-release-UK mortgage, contact our team of specialist advisers today.

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This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.