A home reversion scheme is a type of equity release plan which allows you to borrow against your home.
The scheme provider takes ownership of a proportion of the value and gives you a lump sum or regular income in exchange.
The Advantages
You retain the right to live in it until you sell up or die, when the scheme provider takes the same proportion of the property’s current value.
There is no interest to be paid on the debt.
The Disadvantages
You need to be at least 65 to qualify, and you won’t get anything like the market value for the percentage you sell. (Meanwhile, you’ll remain wholly responsible for the upkeep.)
For example, if your home is worth £200,000 and you decide to sell a half share, you might expect the provider to give you £100,000.
In fact, you are likely to receive around £50,000 or even less.
When you die, unless your heirs are very well-off, they will probably have to sell up to clear the debt.
If your home’s value has remained static and they realise the full £200,000, they will be left with just £100,000.
Hopefully, though, by the time you die, it will be worth far more.
But even if they are able to sell it for, say, £400,000, they can keep only half, as the scheme provider is entitled to the rest meaning it gets £200,000 in exchange for lending just £50,000.
To help you decide if equity release is for you, read Choosing an equity release plan and Questions to ask equity release providers.
If you are interested in finding out how much equity release you could get for yourself, the calculator below will give you a rough idea of what is possible.
To get a more precise figure the best thing to do is to talk to an Equity Release Specialist. To contact a recommended one simply click the “Next” button – after entering your figures – then fill out the quick contact form. You will be contacted soon for a free, no obligation quote.