The Different Types of Equity Release Plan
All equity release plans offer basically the same thing: a way of freeing up part of the value of your home to boost your retirement income.
This might sound simple, but they take very different forms and whichever one you choose, it won’t be cheap.
Although it may provide you with some very welcome cash, the downside is that you could be left with very little to pass on to your heirs.
So, if you or they don’t want a very nasty shock at some point in the future, it’s essential to understand exactly what you’re all getting into before you sign on the dotted line.
The two main types of equity release plan are lifetime mortgages and home reversion schemes.
Lifetime Mortgages
With a lifetime mortgage, your provider lends you a percentage of your property’s value and charges you interest on it.
But, unlike an ordinary mortgage, there are no monthly repayments and no set term.
The loan can continue until you die, when the capital the original sum borrowed and all the interest must be repaid.
To find out more about this type of equity release plan, read Lifetime mortgages explained.
Home Reversion Schemes
With a home reversion scheme, you are selling a percentage of your home in exchange for a lump sum or monthly income.
You can stay in it until you die or decide to sell up, and you continue to be responsible for all maintenance.
When the property is sold, the scheme provider takes that percentage of the sale price.
To learn more about these schemes, read Home reversion schemes explained.
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.