Talk to Our Friendly Equity Release Advisers
What Is an Equity Release Mortgage?
Equity release allows eligible homeowners to access some of the money tied up in their property without having to sell their home and move. It is generally available to homeowners aged 55 and over, although eligibility will depend on the type of plan, provider and individual circumstances.
The money released can usually be taken as a single lump sum, in smaller amounts over time, or as a combination of the two. It may be used for a range of purposes, such as improving your home, supplementing retirement income, repaying an existing mortgage or helping family financially.
There are two main types of equity release: lifetime mortgages and home reversion plans. Lifetime mortgages are the most common form of equity release and allow you to retain ownership of your home.
Lifetime Mortgages
A lifetime mortgage is a loan secured against your home. Unlike a conventional residential mortgage, there is usually no requirement to make monthly repayments, although many plans allow you to make voluntary payments if you choose.
If you do not make payments, the interest is normally added to the amount borrowed. This means interest can also be charged on interest already added, so the amount owed can increase over time.
You continue to own your home and can normally remain living there for the rest of your life, provided you meet the conditions of the mortgage. The loan is generally repaid when the property is sold, usually after the last borrower dies or moves permanently into long-term care.
Different lifetime mortgages offer different features, including lump-sum and drawdown options. Because the amount borrowed and interest added can reduce the value of your estate, it is important to understand the long-term costs and implications before proceeding.
Home Reversion Plans
A home reversion plan works differently from a lifetime mortgage. Rather than borrowing against your property, you sell some or all of your home to a home reversion provider in return for a lump sum, regular payments or a combination of the two.
You are normally given the right to continue living in the property for the rest of your life, subject to the terms of the agreement. When the property is eventually sold, the provider receives its agreed share of the sale proceeds.
The amount paid for the share of your property will normally be less than its full market value. You also no longer own the proportion of the property that you have sold.
Home reversion plans are much less common than lifetime mortgages, but they remain one of the two main forms of equity release. It is important to consider the advantages, disadvantages and alternatives carefully before deciding whether either type of equity release is appropriate for you.
How Does Equity Release Work?
Speak to an Equity Release Adviser
The first step is to discuss your circumstances and what you want to achieve. An adviser can explain the options available, assess whether equity release may be suitable and discuss alternatives that should also be considered.
Find Out How Much You Could Release
The amount available will vary according to your circumstances and the provider’s criteria. Your age and property value are important factors, but the type and location of the property and, in some cases, health or lifestyle factors may also be considered.
Consider Your Equity
Release Options If equity release is appropriate, your adviser can compare suitable options and explain important features such as interest rates, lump-sum or drawdown facilities, voluntary repayments and any applicable charges.
Receive a Personalised Recommendation
Following a detailed assessment, your adviser can recommend an appropriate plan and provide an illustration showing how it works, including the amount released, interest rate, charges and potential future balance. This gives you an opportunity to consider the long-term implications before deciding whether to proceed.
Independent Legal Advice
If you decide to continue, a solicitor will deal with the legal aspects of the transaction. You will receive independent legal advice so that you understand the terms of the agreement and the effect it will have on ownership of your home and your estate.
Valuation, Application and Completion
The provider will arrange a valuation of your property and assess the application. Once the necessary checks and legal work have been completed and the application has been approved, the equity release plan can complete and the agreed funds will be released. Depending on the plan selected, you may receive the money as a single lump sum or have the ability to draw further amounts when required. Equity release is a long-term financial commitment and can affect your entitlement to means-tested benefits and the inheritance you leave behind. Taking specialist advice can help you understand both the benefits and potential disadvantages before making a decision.
How Much Equity Can I Release?
The amount of equity you can release from your home will depend on your individual circumstances and the criteria of the equity release provider. There is no single percentage that applies to everyone, so it is important to get a personalised assessment rather than relying on a general estimate.
With a lifetime mortgage, some of the main factors that can influence how much you may be able to release include:
- Your age – generally, the older the youngest applicant is, the greater the percentage of the property’s value that may be available.
- Your property’s value – the provider will normally arrange a valuation as part of the application process.
- Property type and location – providers have their own criteria regarding the types of properties they are prepared to accept.
- Single or joint application – for joint applications, the age of the youngest applicant will usually be an important factor.
- Health and lifestyle – some providers may offer different terms where certain health or lifestyle conditions apply.
- The equity release plan selected – different providers and lifetime mortgage products have different maximum loan-to-value limits.
Lump Sum or Drawdown Equity Release?
You may not need to release the maximum amount available to you.
A lump-sum lifetime mortgage provides the agreed amount in one payment. This may be appropriate where you have a specific need for the money, such as repaying an existing mortgage, making home improvements or providing financial help to family.
A drawdown lifetime mortgage can allow you to take an initial amount and place additional funds into a reserve facility to access later, subject to the terms of the plan. Interest is generally only charged on money once it has been withdrawn, which can help reduce the amount of interest accumulating compared with taking the entire amount at the outset.
Get a Personalised Equity Release Illustration
Before proceeding with equity release, it is important to understand not only how much you could release, but also how the borrowing could affect the value of your estate over time.
Mortgage Force can assess your circumstances and explain the options available to you. If equity release is suitable, your adviser can provide a personalised illustration showing the amount you could release, the applicable interest rate and charges, and how the balance could change over time.
You do not have to release the maximum amount available. In many cases, releasing only what you need can help reduce the amount of interest that accumulates over the life of the mortgage.
Equity Release Mortgages - FAQs
There can be several costs associated with equity release, including valuation fees, solicitor fees, lender arrangement fees and adviser fees. Some products allow certain costs to be added to the loan. Your adviser will explain all charges before you proceed.
Equity release mortgages, usually Lifetime Mortgages, allows homeowners aged 55 and over to release money from their property while continuing to live in their home. The loan is typically repaid when the property is sold after death or a move into long-term care.
The amount available depends on your age, property value and the type of equity release product selected. In general, older applicants can usually release a higher percentage of their property’s value.
Yes. With a Lifetime Mortgage, you remain the legal owner of your home. The lender places a charge against the property, but ownership remains with you.
Most modern equity release plans are portable, meaning you may be able to move to another property in the future, subject to the lender’s criteria and approval.
Equity release will usually reduce the value of your estate because the loan and any accrued interest are repaid from the proceeds of your property sale. Some products allow you to protect a portion of your home’s value for inheritance purposes.
Many modern Lifetime Mortgages allow voluntary repayments, helping to reduce the amount of interest that builds up over time. The repayment options available vary between lenders and products.
Equity release can be a useful solution for some homeowners, but it is not suitable for everyone. Alternatives such as downsizing, using savings or other forms of borrowing should also be considered. Independent equity release advice can help you understand your options and make an informed decision.
Speak to an Equity Release Adviser
If you’re considering an equity release mortgage or would like to understand your options, contact Mortgage Force today.
Our experienced advisers can explain how equity release works, compare available products and help you make an informed decision with confidence.
Important: Equity release mortgages may not be suitable for everyone. A lifetime mortgage is a loan secured against your home. It will reduce the value of your estate and may affect your entitlement to means-tested benefits.
Why Choose Mortgage Force?
Mortgage Force provides independent advice for equity release mortgages across the UK. We offer:
- Clear, jargon-free guidance
- Access to a wide range of lenders
- Advice tailored to your circumstances
- Support throughout the application process
- Ongoing assistance for you and your family
We believe equity release should only be recommended where it genuinely meets your needs and long-term objectives.
Equity Release Mortgage Advice
Speak to our Local Offices
Our equity release mortgage advice is available nationwide, but many homeowners prefer to work with a local adviser who understands the market.
If you’d like to speak to a Mortgage Force adviser near you, choose your local office below.
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