How Much Equity Can You Release?

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FAQs

equity-release-compareWhat is the minimum age for equity release?

In most circumstances you will need to be at least 55 – this applies to both you and your partner for joint owners.

How much equity is in my home?

The value of the equity in your home is the difference between its value and the total of any outstanding loans or mortgages secured on the property.

Your property should be worth at least £70,000 although this may vary between different providers. Our advisers can search the market and let you know the requirements.

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Does it matter if I have an outstanding mortgage or debts secured on the house?

You may still be eligible for equity release in these circumstances, but you would need to pay off these debts with the proceeds from the equity release.

Do you qualify for Equity Release?

You must own and occupy a UK property of standard construction.
You (and your partner if applicable) must be aged 55 or over. For some home reversion plans the minimum age may be higher.
Your property must have a value of at least £70,000
If the home is owned jointly, both parties will need to agree to the equity release.

How much money can I release?

This will depend on a number of factors including age and the value of your property. Our advisers can provide a precise figure. Generally speaking, the older you are and the more your home is worth, the more money you will be able to release.

For some plans you may be able to release more money from your home if you are in ill-health.

There is no way to get an accurate figure without an adviser taking into account your full personal circumstance.

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Can other people live in the house?

Yes, but lenders may require anyone apart from you and your spouse living permanently in the property to sign a form acknowledging the equity release plan.

Will equity release affect my benefits?

Equity release will reduce the value of your estate and could affect your entitlement to state benefits. Our advisers can assist further with this once they are aware of your personal circumstances.

How long will it take to get my money?

As always, this depends on how smoothly the process goes and how quickly requests for information are fulfilled. Around 6-8 weeks would be a reasonable estimate.

I have an outstanding mortgage. Can I still apply for equity release?

Yes, it is likely that you can, but some of the proceeds will be needed to pay off the outstanding mortgage.

Is the lump sum tax free?

Yes, any lump sum you receive from equity release will be tax free. If you use the some for some form of investment or pay it into a savings account then any income derived from this will be subject to tax, and would be taken into account for means-tested benefits.

Do I still need to pay council tax?

Yes, you will continue to be responsible for paying council tax on the property.

What are the inheritance tax implications?

Equity release plans will reduce the value of your estate if some, or all, of the money is spent. You will have less to leave to your family.

Do I still need to insure and maintain my house?

Yes, you should still have buildings and contents insurance and it is likely that you will still be responsible for maintenance and repairs. Some providers may have a plan that includes a repair and maintenance contract – our advisers can discuss this with you.

Do I still own my home?

If you choose a lifetime mortgage, then the property remains in your name in the same way as a conventional mortgage.

With a home reversion plan, then you sell the property to the reversion company, so they become its owner (either wholly or in part). You can continue to live there, however, until the end of your life or until you move into permanent long term care facilities.

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What if either I, my partner, or both need long term care?

If there are two people on the plan and only one of you needs permanent long term care then the plan will not be affected.

If the remaining partner also needs to move into long term permanent care then the property would usually be sold and the equity release plan repaid.

Can I pay off my equity release loan early?

In general, yes, although there will be an early repayment charge if you repay in whole or in part. There is no charge when the loan is repaid upon your death or moving permanently into long term care. There is no charge if you move home and transfer your mortgage even if you are required to make a part repayment because you are moving to a home of a lesser value.

What happens on my death?

When you die, or your partner dies if they outlive you, the property will be sold. If you have a lifetime mortgage, then the proceeds from the sale will be used to pay off the loan plus interest. Any surplus funds will become part of your estate and inheritance as normal.

If you have a home reversion plan then the proceeds will repay the the reversion company their outstanding amount and the remainder becomes part of your estate.

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