Equity Release
How could releasing equity help you?
The value of homes has increased significantly over recent years, and this, combined with the higher cost of living and reduced pension incomes, means many people are choosing to release equity to help with their plans in later life. For most, the home is the biggest asset they own.
People release equity for many reasons. Some use equity release to repay an existing mortgage. Others may raise funds for home improvements, holidays, or to help children and grandchildren through gifting. It’s your equity – how you use it is up to you (within reason!).
Our adviser will help you ensure you are releasing the right amount for your current and future needs.
What are the benefits of equity release?
The vast majority of equity release is done through a Lifetime Mortgage. The benefits of Lifetime Mortgages are:
- You can raise a tax free cash lump sum to spend as you please
- You don’t have to make any monthly payments (but you have the option to do so voluntarily)
- You maintain full ownership of the property and benefit from any future increase in value
- You have the security of knowing the interest rate will not change for the rest of your life
- You have peace of mind from the guarantee of no negative equity – so no debt will be left to your loved ones.
- You can move house and transfer the mortgage to a new property, subject to conditions.
How much can you release?
This depends upon the value of the property and the age of the youngest borrower. Complete our calculator by clicking below to see how much tax free cash you could potentially release.
Equity Release Calculator
I would highly recommend Jordan Lynch. Both Tim Lynch and Ian Keeling are excellent and they certainly know what they are talking about when it comes to finances and equity release.
Caroline Heenan via Trust Pilot
Types of Equity Release
Lifetime Mortgage
This is a loan secured on your property that only requires repaying when the last borrower dies or has to move into long term care. The interest, which is typically fixed for life, is normally added to the loan each month meaning the amount that you borrow increases over time. You retain full ownership of your home and so benefit from any increase in its value. In the unlikely event that the amount owing exceeds the value of the property at the end, there is a ‘no-negative equity guarantee’ which ensures that no debt is passed on to your beneficiaries.
If you have spare income then you are able to make voluntary payments on a regular or an ad-hoc basis. For example, you could pay the interest each month meaning the amount owing will not increase.
Lifetime Mortgage with drawdown
This works in the same way as the lump sum lifetime mortgage but involves taking a smaller initial sum and having an agreed facility to draw further funds as and when required. As you only get charged interest on funds that have been drawn, it can reduce the impact to your equity, however you should bear in mind that such drawdown facilities are generally not guaranteed and the interest rates on future drawdowns are fixed at the prevailing rates at that time so could be more (or less) than the rate charged on the initial sum.
Home reversion
This is the least common form of equity release. With a home reversion plan, you sell part, or all, of your property for a tax free lump sum and you retain the right to remain in the home for as long as you live. The provider will not give you the full market value, but will instead discount it based on how long they think you may live for. You typically do not pay any rent to the home reversion provider.
Important Considerations
Equity release can be a good way to obtain extra money in retirement, but it isn’t right for everyone. Here are some things to consider if you are thinking about taking out an equity release plan:
- Interest is added to the loan, usually monthly, so it will roll up (unless you choose to pay it). As a result, the amount you owe will increase over time reducing the amount you leave to your beneficiaries.
- Equity release can impact on any means-tested benefits that you may be eligible for.
- The amount of inheritance that you leave will be affected, as the loan amount and interest accrued will be deducted from the value of your property when it is sold.
- If you decide to move home you will need to either repay the amount owed or transfer your plan to your new home. You will be responsible for the provider’s costs if you transfer the loan and the new property will have to meet the provider’s lending criteria.
- If you repay the equity release mortgage early, there may be early repayment charges.
- “No negative equity” guarantees will normally apply, meaning that, providing you have complied with the terms and conditions, the total amount borrowed plus interest will never exceed the total value of your property.
Rest assured, if we feel that equity release isn't right for you, we will not recommend it and will tell you the reasons why.
Equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. To understand the features and risks ask for a personalised illustration.
Personal, expert advice
Here at Jordan Lynch, we have experts in all types of home finance and equity release is no exception. Our dedicated equity release adviser, Ian Keeling will help you from start to finish, unlike with larger firms where you would deal with several people depending on what stage you are at.
Initially he will spend time understanding your circumstances and needs. Equity Release may not be the best solution for you, in which case he will tell you why and explore the alternatives. The great thing about Jordan Lynch is that we specialise in all types of home finance so we may be able to advise you on a better way to achieve your objectives.
Ian has worked in financial services for over 30 years and during his career he worked as a director of sales and marketing for a local building society where he took responsibility for developing later life mortgage products and for ensuring the firm delivered advice to customers in a responsible and ethical manner. Ian took a decision to take a step back and do what he enjoys the most; dealing directly with clients and helping them achieve their financial goals. He has specialised in equity release advice in recent years and with his knowledge and experience, you are in safe hands.
Contact us to arrange an initial chat with Ian, without cost or obligation.
What our clients think
Get the right advice directly from the experts
Request a callbackThink carefully before securing other debts against your home. If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay. To understand the features and risks of a lifetime mortgage, ask for a personalised illustration.