Could equity release help you buy a home abroad?

If you are searching for a way to buy a holiday bolthole, equity release could be the solution.

Equity release is fast becoming a mainstream retirement planning solution, with more people than ever before accessing their property wealth to fulfil their later life ambitions. A total of 21,490 new customers used Lifetime Mortgage products from Equity Release Council (ERC) approved lenders in the first half of 2018 – a 28% increase from a year earlier.[1]

However, many over-55 homeowners do not know that they can use equity release to purchase a property. If you are interested in buying an overseas home, you might be able to use a Lifetime Mortgage on your UK residence to contribute towards the cost.

What is a Lifetime Mortgage?

The most popular type of equity release plan in the UK is called a Lifetime Mortgage. It allows you to access a portion of your property wealth as tax-free cash. As this is a specialist loan designed with over-55s in mind, there are no required monthly payments, and you retain full ownership of your home. The initial loan, plus interest, is repaid when you pass away or move into long-term care – and can be repaid through the sale of your home.

This is because all plans from an ERC-approved lender come with the no negative equity guarantee as standard. So you will never owe more than the value of your UK home and can’t pass on any Lifetime Mortgage debt to your estate.

Once any outstanding charges against your home are cleared, usually with your released equity, the money is yours to spend any way you see fit – perhaps on a home away from home?

You would need to continue living in the UK

If you decide to release equity to buy a property overseas, you must reside in your UK home for at least six months each year. It’s therefore not possible to use equity release to fund a permanent move abroad, but you can use a Lifetime Mortgage to buy a holiday home for you to enjoy for a large portion of the year. This could allow you to enjoy the best of both worlds, splitting time between family in the UK and your home abroad. It doesn’t have to be the weather you’re after either, as maintaining a home abroad is a great way to experience a different culture and lifestyle than the one you have in the UK.

A suitable solution

A Lifetime Mortgage can be a convenient and safe option to raise funds for your overseas property purchase. However, it is important to understand your current financial situation and how it may change. This is because releasing equity may reduce the value of your estate in time and could affect your entitlement to means-tested state benefits.

If you would like to find out more about the features and risks of a Lifetime Mortgage, an adviser can provide you with a personalised illustration. They will be able to highlight plans appropriate for use on a property purchase – as well as any additional features that may benefit your circumstances. Such as the guaranteed inheritance feature, allowing you to ring-fence a portion of your equity to ensure your loved ones are taken care of.

If you’re looking for your own place in the sun, why not find out how much money you could raise with a Lifetime Mortgage today by using our online calculator? Better yet, why not have a free, no obligation, discussion with a member of our expert Information Team and start turning your dreams into reality.

Use our free online calculator to find out how much you could release today: 

Could equity release help you? Call us now and speak to an expert Information Team Member who will give you all the information you need.

01752 422 930

[1] Source: Equity Release Council – Autumn Market Report 2018 (09.18)

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    Responsible Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register ( under reference 610205.

    This is a Lifetime mortgage which may reduce the value of your estate and may affect your entitlement to state benefits. To understand the features and risks ask for a personalised illustration.

    Any information contained herein is a personal opinion of the author and should not be considered to be advice of any kind. Inheritance Tax planning is not regulated by the FCA. Think carefully before securing other debts against your home. By consolidating your debts into a mortgage you may be required to pay more over the entire term than you would with your existing debt.

    Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,490. Our adviser will talk through the setting up costs of a lifetime mortgage before you make any decision to proceed.