Responsible for your comfortable retirement
Releasing equity from your home is easy with Responsible advice
The Concept Explained
Equity release has become an increasingly common way for homeowners across the UK to fund their dreams in later life. Rising house prices across the UK over recent decades means that the UK’s over-55s have more equity than ever locked up in their properties, equity that can be accessed using a Lifetime Mortgage, the most popular form of equity release.
With a lifetime mortgage, unlike other forms of equity release, you can release tax-free cash from your home whilst retaining full ownership of your home, and without having to commit to making monthly repayments.
How Does Equity Release Work?
Equity release comes in two main forms – lifetime mortgages and home reversion plans. At Responsible Equity Release we only advise on lifetime mortgages as with a lifetime mortgage you retain full home ownership.
To release equity with a lifetime mortgage you must be a UK homeowner aged 55 or over, and the amount of cash you can release from your property depends on your age and property value. The lifetime mortgages don’t come with a fixed end date, rather they are only due for repayment once the last homeowner on the deeds either dies or enters into long-term care. Interest is charged on the amount released, with interest rates typically fixed for life. If you do not choose to make repayments over the course of the loan, then the amount borrowed, plus interest is simply repaid at the end of the term, often via the sale of the property.
Common Uses of Equity Release
Clear an existing mortgage
By replacing an existing mortgage with a Lifetime Mortgage, you could free yourself of monthly payments.
Fund home improvements
Equity release can help you make the changes you’ve always wanted to make, and could add value to your home.
Gift an early inheritance
See your legacy in action and make a difference to the ones you love by gifting equity now rather than waiting.
Boost your disposable income
Equity release can help you give your budget that all important room to breathe later on life.
Choosing the right plan for you
Noel Abbott
- Sales Director -
Information Team
"As equity release has grown in popularity, there has been a dramatic increase in the number and variety of plans on offer."
New customer focussed features have made lifetime mortgages suitable for a wide range of customers, and at Responsible Equity Release we have access to plans from the whole of the market of equity release providers approved by the Equity Release Council. We also have exclusive access to plans not available on the High Street or from anywhere else.
Our Information Team are:
- Based in our Plymouth Head Office
- Completely free and at your service
- Cannot sell but only provide information
- Can let you know how much you could release
- Help you with your initial enquiries and check eligibility
- Arrange telephone based appointments with our qualified advice team when you're ready
The funds can be released in one of two ways. With a lump sum plan you release some of your home’s value in a single amount, whilst with a drawdown plan you release a smaller initial amount upfront, creating a reserve fund to access in the future as and when you wish. With a drawdown plan you are only charged interest on the amount once you draw down, which can reduce the overall amount of interest charged. It can also help you to manage potential impact that a tax-free cash injection can have on any means-tested state benefits you are in receipt of.
With some plans you can make voluntary repayments without penalty, typically of up to 10% of the initial amount borrowed each year. This is another way you can reduce the build-up of interest and mitigate the impact of the lifetime mortgage on the size of your estate.
Plans may also come with inheritance protection guarantees, enhanced terms, downsizing protection, monthly incomes…your dedicated adviser will consider all of your priorities and requirements before making a recommendation.
All plans we offer meet the Equity Release Council product standards, meaning they come with:
- The no-negative equity guarantee
- The right to stay in your home for life
- The ability to move home with your plan if you wish, as long as the new property meets the lender’s criteria
Frequently Asked Questions
Is equity release safe?
Equity release is now regulated by the Financial Conduct Authority. You can rest assured that equity release is now one of the most regulated products in the UK and that these regulations are there for your safety. They exist to allow you to make the most of your property wealth without having to worry about what is going to happen to your home.
Alongside the regulator, a trade body has been established to provide customers with further protection and guarantees to ensure you are always safe when you release equity. The Equity Release Council (formerly known as SHIP) is an organisation dedicated to the protection of the equity release consumer through a code of conduct which goes over and above Financial Conduct Authority Regulations.
Equity release providers have come a long way since the 1990s when bad press was commonplace. This means many rumours are now based on myth and you can feel confident in gaining the financial freedom to pursue lifelong aspirations, clear an existing mortgage, top up income or help with family matters.
Can I lose my home?
All Lifetime Mortgages from Equity Release Council approved lenders guarantee you the right to remain in your property for as long as it is your main residence. This guarantee is written into the offer that both you and the lender will sign. You will still own your home: you’ll remain the legal owner of your home for as long as you require it as your primary residence.
Can I move?
All plans covered by The Equity Release Council are ‘portable’. This means you can move them to another suitable property without having to pay any penalty.
Do I qualify if I already have mortgage debt?
You are eligible if you already have mortgage debt on your property, however the mortgage must be repaid. The amount you are releasing can be used towards repaying the existing mortgage. Many customers use equity release for this very purpose and choose to release a little extra to enjoy their retirement with.
Can I still leave an inheritance?
There are plans available where you can ‘protect your equity’. Here you choose an amount to protect as a percentage, for example 50%. It does reduce the amount you have available to take but it allows you to ringfence a portion and say no matter what, the decision to release equity will not affect that portion of the property. You get the money you require now whilst your children (or other beneficiaries) receive a sizeable inheritance.
How much can I unlock?
The amount you can release varies depending on a few factors. Notably, the age of the youngest applicant i.e. you or your partner; your location in the UK, your property value and your medical history. Try our free online calculator to find a quote.
Will I leave debt to my loved ones?
As part of the Equity Release Council’s no negative equity guarantee, you will never owe more than the value of your home. That means you can’t be in any levels of debt from an equity release plan that cannot be covered by the eventual sale of your property.
When and how do I repay?
There are no required monthly repayments. The loan is normally repaid, along with the accrued interest, through the sale of your property once the last homeowner on the deeds has either passed away or entered into long-term care.
You can repay early: there are flexible withdrawal and repayment options. Plans are available which allow you to make voluntary payments. If you wished to repay the total amount plus accrued interest there may be an early repayment charge.
Most equity release providers will allow your estate up to 12 months to sell the property before they even ask any questions. As long as they are taking reasonable steps to sell the property, that is all the lender looks for.