Home Equity Release UK

Home Equity Release UK

Home equity release UK refers to an option sought by mature individuals in the UK to produce cash from the value of their property. Home equity release UK products are only available to individuals aged 55 or over seeking extra income for personal or financial reasons. Our team of expert advisers make every effort to find an appropriate home equity release UK mortgage for each of our clients, based on their financial needs.

Home equity release UK mortgages provide each borrower with a sum of cash, which can be spent in any way the borrower intends. As an exchange, the borrower must either repay the mortgage back to the provider by the end of the contract, or concede ownership of their property to the provider. The contract come to an end when the borrower of the home equity release UK dies, or occupies residency in a care home without the intention of returning to their existing property.

A home equity release UK that permits the borrower to repay the mortgage at the end of the contract is known as lifetime mortgage. There are three schemes associated with lifetime mortgage; interest only schemes, interest rollover schemes and home income plan.

Interest only schemes function by allowing the borrower to pay the mortgage back to the provider after the contract is terminated, yet the borrower must make monthly payments of interest to the provider every month. An interest rollover scheme has a slight variation in comparison to interest only schemes, as interest does not have to be repaid monthly. Alternatively, interest is calculated monthly and attached onto the full mortgage debt. Home income plan schemes require the borrower to repay monthly packages of mortgage and interest. The cash generated from the mortgage may be used by the borrower to obtain an annuity, supplying a lifetime income for the borrower. This income may be used to repay monthly repayments of debt.

A lifetime mortgage may be able to favour some borrowers, due to the fact that the borrower does not lose ownership of their own property. In addition, equity may be left on the estate, allowing the inheritors of the borrower to benefit from the estate. However, variable interest rates can diminish the quantity of the equity left in the estate, following the end of arrangement. In addition, younger borrowers may be at a disadvantage as their increased life expectancy signifies years of rolled up interest adding to total debt. Our advisers will offer each client thorough information on each scheme and evaluate which is most suitable for the client’s financial and personal requirements.

Home reversion home equity release UK mortgages are an alternative form of home equity release UK product. There are no monthly fees the borrower has to repay to the provider and the borrower is also guaranteed occupancy in their home for the remainder of their life. Along with this, the borrower receives a cash sum, which can be spent however they wish. In return, the provider is entitled to a share in the borrower property, which is sold after the death of the borrower. A full home reversion home equity release UK mortgage entitles the provider to 100% of the property’s share, whilst a part home reversion home equity release UK plan allows the borrower to retain a certain proportion of the property’s share.

If a mature individual considering whether a home equity release UK scheme is a realistic option, we may be of assistance in finding the perfect form of equity release. It must be clear to the individual that other options other than equity release may serve more benefit.

There are many benefits and risks associated with home equity release UK mortgages.  Selecting an inappropriate home equity release UK mortgage may result in a substantial build up of debt, or even affect the plan holder’s inheritance. Our team of specialist advisers offer help to individuals who are hoping to arrange a home equity release UK scheme, by seeking a suitable arrangement that cost effective and beneficial to the financial and personal needs of the client.

If you are interested in receiving advice on home equity release UK deal, contact our specialist team of advisers today.

How to get in touch

Feefo logo

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