Speak to a member of our Information Team on  0800 048 5384

Equity release vs downsizing – what’s the right option for you?

22/02/2022 |  min read
Equity release vs downsizing – what’s the right option for you?

Downsizing your house is a popular way to take advantage of the equity that has built up in your home. However, if you’ve gained an attachment to your beloved home and don’t want to move out, releasing equity is another option for you to consider.

Downsizing

Downsizing your home means selling your home and buying a cheaper property. This may happen by buying a smaller property or purchasing in a lower priced area. Once you have sold your property, you keep the money left over.

Equity release

Equity release means releasing tax-free cash from the equity that has built up in your home. There are two different types of equity release: a Lifetime Mortgage and a home reversion plan. A Lifetime Mortgage is the UK’s most popular form of equity release, as your home remains 100% yours.

What are the advantages and disadvantages of downsizing?

If you’re considering downsizing to fund your retirement, pay off debt or provide an inheritance, it’s important to consider your options carefully.

Some of the pros to downsizing are:

  • Selling your property is quite straight forward from a financial standpoint. You sell your house at market value and buy a cheaper one.
  • Moving might be a more practical choice for you. You may need to prepare for the future by moving to a bungalow or flat.
  • You may want to move to be closer to family and choose to relocate.
  • Your new property will 100% be owned by you and it can be left to your loved ones as inheritance.
  • Downsizing can be done at any age or stage of your life.
  • Your new property could be cheaper to maintain.

Some of the cons to downsizing are:

  • Moving is expensive – purchasing a new home, estate agent fees, legal fees, removals, and stamp duty need to be factored into the cost.
  • With demand outstripping supply, it could be stressful for you to find a home that you are completely happy with.
  • Emotional factors – if you have lived in your home for several years and were to move to a different area, you could be leaving behind a lot of memories as well as friends and family.
  • If you do choose to move to a new area, it’s not only a new house and neighbours you need to settle into. You will likely need to find new healthcare options and spend a lot of time doing personal admin.
  • Less support – you will likely have to arrange much of the process yourself. If you choose Responsible and equity release however, then you will have your own personal adviser with you throughout the entire process.

Why choose equity release?

Equity release has benefits over downsizing that could make a large difference to your retirement future. Maintaining 100% homeownership with a Lifetime Mortgage, means you can remain in the comfort of the home you have grown to love and filled with family memories. The current growth in the housing market could mean that you benefit from an increase in your home's value over time, helping to offset the impact of interest build-up. This along with flexible features like voluntary payments, make releasing equity a cost-effective way to borrow. It’s also important to know that a Lifetime Mortgage will reduce the value of your estate and may affect your entitlement to means-tested benefits.

Responsible Equity Release can provide you with professional advice on equity release, including Lifetime Mortgages. See if you are eligible or learn about more about the pros and cons of choosing this option instead.

Are you ready to start your Responsible journey, or want some more information?

Use the free calculator on this page to see how much equity you could release from your home.

Alternatively, for some more information or to book a no-obligation appointment with one of our fully qualified advisers, get in touch with our UK based Information Team today on 0800 048 5384.

Responsible Equity Release will only ever use lenders that are members of the Equity Release Council, meaning that you will always enjoy the safeguards guaranteed by them.

Related articles:

Ready to start your journey?

Equity release calculator

Enter your postcode and press 'Get address'
We need your full address to be able to send you your free guide to equity release. Please ensure you have selected your address from the list.
Please use the get address button above then select your address from this dropdown list.
£ Enter the value of your property to calculate how much you can release. You must own a home with a minimum value of £70,000 to release equity.

Are you interested in learning more?

To find out more about Lifetime Mortgages, and the various features available, why not book a no-obligation appointment with one of our fully qualified advisers? The Information Team can help with this on 0800 048 5384.

You can call our Information Team free on:

Or you can

Schedule a call

Opening Hours:

Monday to Friday 9am to 8pm and Saturday 9am to 5pm

Trust Score 5 out of 5
Based on over 1,410 reviews on Trustpilot

Our 5-star rated service.

“I do not normally write reviews, unless I feel the service was exceptional.”

“Richard Johnson was my Equity Release advisor, who I can genuinely say, did a thoroughly professional job in keeping me informed, raising the pitfalls, as well as the advantages of the various options, and monitoring the paperwork throughout this process. I do not normally write reviews, unless I feel the service was exceptional.”

5 out of 5

Mr. Sharratt

Cumbria, England

“Should anybody read this review then fear not, you will be in safe hands.”

“I contacted Mr Kevin Williams to help guide us through the ER process, Kevin was extremely helpful, polite and kept us informed at all times. He was very efficient and keen to answer our questions, how nice to deal with somebody that is not ‘pushy’ or ‘aggressive’, I have the greatest respect for Kevin and should anybody read this review then fear not you will be in safe hands.”

5 out of 5

Mr. & Mrs. Croft

Denbighshire, Wales