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Equity Release Mortgages (Age 55+)

Equity Release allows homeowners over the age of 55 to access cash tied up in their property.

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Can I get equity release?

Yes, if you are a homeowner with enough equity and are aged 55+ then equity release mortgages are likely to be an option.

Here are popular uses of an equity release mortgage:

  • Supplement your retirement income.
  • A lump sum for a large purchase.
  • Buying a new home and don’t have enough funds.
  • Repaying a mortgage that is ending.
  • Debt consolidation.
  • Anything else or it’s complicated.

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What are the types of equity release available to me?

There are two main types of equity release mortgage available from age 55, these are:

  1. Lifetime mortgage – you’ll retain ownership of your property and be able to live there until you die, sell the property and repay the loan, or go into long term care. Monthly payments of interest are optional. Tax-free equity can be released in a lump sum or smaller chunks as and when required.
  2. Home reversion plans – you’ll hand over ownership of your property to a lender in exchange for a tax-free lump sum of money and the right to reside in the property until you die or go into long term care.

Both are available in sole or joint names and for leasehold or freehold properties

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Which equity release mortgage is best for me?

It’s important to speak with an independent mortgage broker who specialises in retirement mortgages like us as there may be cheaper alternatives to consider before
equity release.

Equity release mortgages, for the right applicants, can work well and offer a great deal of flexibility in respect of moving home in the future, making overpayments, paying
monthly payments towards your interest etc.

Also, there are some features such as taking your tax-free money as smaller amounts, this is called a drawdown lifetime mortgage, could save you paying more interest than you need to. Schedule a free, no-obligation call with our team today to find out your options.

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Equity Release FAQs

What is equity release?

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Equity release is a form of later life mortgage available to homeowners aged 55+ who have a property that is worth at least £70,000.

The most common type of equity release is the lifetime mortgage. With a lifetime mortgage you can release money as a loan secured against the value of your home.

You retain ownership of your home in the same way as with a conventional mortgage. The lender needs to be repaid, generally from the sale of your home, after you either die or move into long-term care.

Why is equity release more popular now?

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With an estimated 10,000 older clients having suffered heavy financial losses at the hands of unscrupulous firms holding out the hope of a risk-free comfortable retirement through Home Income Plans in the 1980’s, it’s hardly surprising that Equity Release has been regarded with suspicion. Following the ban of home income plans in 1991, equity release has slowly begun the climb back to prominence.

Effective regulation under the Financial Conduct Authority has certainly helped with this, however, it is the standards set by the Equity Release Council, formerly Safe Home Income Plans (SHIP) which has led to dynamic change in the industry led to a much safer and consumer friendly process with advice personalised to a client’s individual circumstances.

The Equity Release Council, along with the lenders, advisers and solicitors who make up the bulk of its membership have driven innovation in consumer protection including elements such as interest rates which are fixed for life; the right to make penalty-free payments; portability to another property and, crucially, the “no negative equity guarantee”.

This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.

UK Moneyman Limited and our later life mortgage advisor Dan Osman are voluntary registered members of the Equity Release Council, adhering to the standards they have set and providing customers with a holistic, tailored service which takes into account the available alternatives, anticipated futures changes and other aspects of later life planning. Family, or trusted friends/advisors, are also encouraged to be part of the process. Dan is also an active member of SOLLA (Society of Later Life Advisers) which promotes high standards in later life lending advice.

Is releasing equity right for me?

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Maybe. The role of a qualified later life mortgage advisor is to spend time getting to know you, your plans and your hopes for later life.

We will explore the alternatives available to you and look to provide the best value solution for your needs in the long term. We encourage family to be part of these discussions, but that is always your choice.

Rest assured that if equity release is not the best option for you, your later life mortgage advisor will tell you and either provide an alternative solution, or refer you to another professional who can.

Do I still own my home if I take out an equity release plan?

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You retain 100% ownership of your home so when it is sold after your death or entry into long-term care, the balance of the remaining equity after the lender has been repaid will go to you or into your estate.

Will I end up paying more interest than I borrowed on equity release?

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UK Moneyman Limited and the equity release providers we recommend are members of the Equity Release Council which ensures a high level of protection to older borrowers. One of the key safeguards offered by Equity Release Council members is the “no negative equity guarantee”.

This means that, if the property is sold for a fair market value and the amount you owe including any interest accrued exceeds the sale price after estate agents and solicitors’ fees, neither you, nor your estate or family will be liable to pay any more.

In terms of how much interest you will pay, this is determined mainly by the amount you are borrowing as a percentage of the value of your house and the age of the younger borrower, although other factors can have an impact. Interest rates are generally fixed for the life of the loan.

Repayments of just the interest or larger sums are optional with most lifetime mortgages, meaning that you can pay what you can afford to reduce the amount of interest adding to the loan.

If you don’t make any repayments, the interest will add to the loan and compound, meaning the amount of interest will be more each year, as you would be paying interest on the interest already added.

This will increase the debt against your home, which means there will be less for your beneficiaries or for you to use for later life costs, such as paying for care.

How much does equity release cost?

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The costs of equity release will vary depending on a selection of different factors. These include the amount of equity you’re looking to release, how old you are, how long you would like your plan to last, the interest rates attached to the plan and the ways in which you would like to personalise your equity release plan.

Much like a regular mortgage, you will still have to factor in additional costs such as a surveyor’s fee, solicitor’s fee and a mortgage broker fee, set at the discretion of your mortgage advisor.

Can equity release stop me leaving an inheritance?

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There are a lot of variables when it comes to inheritance and equity release, depending entirely on what it is you are looking to do. Lifetime mortgages will incur some form of interest. What you choose to do with this interest could affect your inheritance.

Some homeowners will look to pay back all of their interest, which will just leave the capital balance to be paid back upon death or moving into long term care. Others will let the interest roll up, which means there will be a higher mortgage balance to be paid back upon the sale of the property.

The more equity you take out of your property, even if you pay back all of the interest, the less you will have left for inheritance.

Alternatively, if you choose to let the compound interest roll up, this will generally reduce your inheritance further. In some instances, there may be nothing left for inheritance, once the home is sold and the lifetime mortgage balance has been paid back.

We would always recommend speaking with a qualified later life mortgage advisor, to discuss how best to approach your equity release options. If you would like a specific amount to be left for inheritance, this should form part of your initial discussion with your advisor.

Many homeowners will take out a lifetime mortgage as a way to release equity, with a view to gift an early inheritance to a family member. This could be for reasons such as a deposit to purchase their own property.

We would also suggest speaking with a qualified tax advisor to further understand inheritance taxation.

What if I need more money later?

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If you know from the start that you may need more money in the future, it is important to talk about it with your later life mortgage advisor, as it may be possible to arrange a cash reserve facility which gives you easy access to more money in the future.

If you have a lifetime mortgage with no cash reserve, you may still be able to get a further advance from your lender.

This must be arranged with a qualified later life mortgage advisor, who will also compare the available plans on the market to see if you would be better off with a further advance, or moving your lifetime mortgage to a different plan.

Can I move home if I have an equity release plan in place?

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Lifetime mortgages are portable! If you want to downsize at a later date, you can generally move your mortgage to the new property subject to the lender’s terms and conditions. If you plan to move to a specific type of property in the future (e.g., an age-restricted property for the over 60s), please discuss this with you advisor as some lenders are better at accommodating this than others.

If this is a possibility, you should talk to your later life mortgage advisor in depth about your plans to make sure you’ve got the flexibility you want.

Lifetime mortgages can also be used to buy a house. Many people want to move to be nearer family but can’t due to property prices, a lifetime mortgage could help you raise the extra funds you need.

What are the benefits of lifetime mortgages?

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There are lots of benefits to taking out a lifetime mortgage. One of the main benefits to this, is that whilst you do have the option to make monthly mortgage payments if you would like to, you have the option of letting the interest roll up, leaving you without any monthly payments.

Once you have passed away or moved into long-term care, your property is sold to pay off the mortgage balance.

Once I have a lifetime mortgage, am I stuck with it?

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Firstly, a lifetime mortgage is designed to be a long-term solution and changing it once in place can be expensive.

It is, however, worth reviewing your lifetime mortgage on a regular basis, as a small drop in interest rates can make a big difference to the cost of the loan in the long run. A later life mortgage advisor will be able to give you an analysis of potential savings, including all costs.

If you want to repay your lifetime mortgage, (for example, because you have received an inheritance) you can at any time, however, there may be penalties.

It is important to consider all likely future events when speaking to your later life mortgage advisor as it will help them to recommend a product which remains as flexible as possible to take your plans into account.

What are the different types of lifetime mortgages?

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Lifetime mortgages can either come as a lump sum lifetime mortgage or a drawdown lifetime mortgage.

A lump sum lifetime mortgage works as the name suggests, allowing for you to release your funds, tax-free, into one big lump sum. This allows you to retain complete ownership of your home, without the need to make monthly repayments, and no restrictions on what you can use it for. If you release funds to keep on deposit as savings or emergency funds you will be likely to receive less interest on this money than the interest you will be being charged on your lifetime mortgage, you may be better considering a drawdown lifetime mortgage.

A drawdown lifetime mortgage works similarly, but instead only releases part of the equity in your property, giving you the option to draw additional equity from the property as and when you need it. This actually reduces the overall cost of your mortgage, as interest is only charged on the amounts you draw out, which could save you a lot of money!

The criteria to qualify for each of these types of lifetime mortgage is the same as one another.

Is there anything else I need to do for equity release?

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Apart from speaking to a later life mortgage advisor about whether equity release is right for you, it is worth thinking about other arrangements which can be made for the future.

We strongly recommend talking to your family about equity release, bringing your will up to date and arranging lasting powers of attorney.

These are all important as, often, it is your family as beneficiaries (after your death) or attorneys (if your mental capacity is impaired) who will have to sell the property to repay the lifetime mortgage.

It is like everything else, proper planning now makes things easier, and generally cheaper, later.

What is equity release & how can it help?

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If you are a homeowner with a property that is worth at least £70,000 and are aged 55 or over, equity release may allow you to release tax free funds from your home either as a single lump sum or as an initial amount with further funds available to draw on in the future.

The most popular type of equity release is a lifetime mortgage. This type of mortgage can come in two forms, a lump sum lifetime mortgage or a drawdown lifetime mortgage.

Equity release provides an element of control back to your personal and financial life, though it’s not for everyone. A qualified later life mortgage advisor will make sure this is right for you.

In its most basic form, the interest is added to the balance each month (compound interest) and the loan, together with accrued interest, is repaid when you either die or go into long-term care.

Here at UK Moneyman, we offer both forms of equity release, lifetime mortgages and home reversion plans.

How does releasing equity work?

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Lifetime mortgages have become a lot more flexible in recent years and there are now various ways in which you can repay the interest on your property instead of letting it increase the amount you owe.

This can range from a set monthly payment to service just the interest to flexible ‘ad hoc’ payments from as little as £50 per payment which you can pay when you choose.

This is usually subject to an annual limit but your mortgage advisor will be able to take your repayment preferences into account. All repayments are voluntary so, if your circumstances change, you are free to stop making payments whenever you choose.

The majority of lifetime mortgages (and all of the ones we recommend) adhere to the standards set out by the Equity Release Council. This brings some important protections for borrowers, that your advisor will discuss in more depth with you during your appointment.

8 Reasons to Choose UK Moneyman for Equity Release Advice

Working hard 7 days a week!

We work to a time that suits you. You can put your personal life first, attending your free equity release mortgage appointment at a time convenient to you.

Free initial equity release mortgage appointment.

During your free equity release mortgage appointment, we can go over your options with you. This includes lifetime mortgages.

We are proud members of the Equity Release Council!

As members, we have agreed to follow the Council rules, safeguarding our customers and providing a high standard of conduct.

We work for you, we have your best interests at heart.

We will be open and honest at all times; finding you a deal that suits your personal and financial situation.

Jargon-free insurance advice for you and your family.

We'll recommend the most suitable insurance products to protect you and your family, should you become seriously ill or unable to work.

1000s of equity release options.

We will compare different equity release mortgage deals across the market. We have a large panel of mortgage lenders to choose from.

We are dedicated and experienced.

We have been in the mortgage industry now for over two decades. If you need help with equity release, get in touch!

From the start until completion.

We will be there for you throughout your whole mortgage process, recommending the best equity release deal for your situation.

Popular client situations for Equity Release

Equity Release Advice to Supplement Pension Income

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Into and approaching retirement, clients over the age of 55 can often find themselves assets-rich but income-poor. An equity release mortgage will allow you to release some of the value of your home, tax-free, either as a lump sum or in smaller amounts when required.  This cash can then be used to help supplement your pension income so you can enjoy a more comfortable retirement. 

If it’s income you are looking for and you do not require all the money at once, a drawdown equity release plan will save you from paying interest on more borrowing than you need as you’ll only pay interest on the amount you’ve drawn out and not the full balance available to you, like a credit limit.   As part of our equity release advice process, we’ll run through all your options here with a view to keep your interest payments to a minimum.  

There is also a lot of flexibility with equity release plans meaning that you can take a mixture of smaller and larger amounts as and when required.  

We find that equity release works best when your family members are included in the conversations early in the process.   Equity release will reduce the value of your estate and inheritance so it’s a good idea to let your family members know your plans.  

As with all equity release plans, it’s important to speak to a trusted later life mortgage advisor to run through all your options and for them to recommend the best way forward for based on your personal situation.  

If you claim means-tested benefits, in some cases, an equity release plan could affect the amount that you receive so it’s important to always seek professional mortgage advice.  

Equity Release Advice to Consolidate Debts

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For many older clients, managing their debts can prove difficult and stressful on pension income. Whether your debts are made up of personal loans, credit cards, car loans or store cards we can look at your consolidation options. With credit and store cards, paying the minimum payments can be expensive and the balance reduces slowly, and you can often feel stuck between a rock and a hard place.  

We can look at combining your debts and with a lifetime mortgage, you’ll have the option as to whether to pay a monthly payment or not.   If it’s affordable to you, it’s always good to pay something towards the interest per month as this saves you a lot of money in the long run.  

It’s important to see trusted professional later life mortgage advice when considering consolidating debts via equity release.  There are lots of risks, alternative products and considerations your later life mortgage advisor will go through with you.   

Alternative products to equity release for debt consolidation include a full range of later life lending solutions such as a regular or retirement interest only (RIO) mortgage along with zero percent credit card transfer and low interest personal loan deals.  

Equity Release Advice to Repay an Interest-Only Mortgage

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Many of our older clients use a later-life mortgage or equity release plan to repay their interest-only mortgage as it’s coming to an end.  For younger clients still with employed or good pension income a regular repayment or part-repayment mortgage product maybe recommended by our team based on your affordability.  

If you do not have the money to repay your mortgage loan in full at the end of the term, it’s best to start reviewing your interest-only mortgage repayment options as soon as possible to so you have a plan for the future.  Another option for you to consider if you have enough equity is downsizing to a smaller property to repay your mortgage and be mortgage free on your new home.  

If you have an interest-only mortgage, a couple of years before your term ends your existing mortgage lender will write to you several times checking that you have a plan to repay the balance in place.  At the end of the term, you can pay the outstanding balance via bank transfer or use another mortgage, usually a later-life product designed to help older clients in this situation.  

Our later life mortgage advisor will consider all your options and your future plans to make a recommendation as the best way forward to keep your interest payments down to a minimum.  

We’ll consider the full range of lending options, including a regular mortgage, a retirement interest-only mortgage or a lifetime mortgage product. Often, our advice involved a phased approach personalised to your individual needs. 

Getting a mortgage in later life isn’t easy and you’ll find it invaluable to have a professional mortgage broker on your side.  Speak with our team today and we’ll answer all your questions.  

Equity Release Advice to Move Home

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An equity release plan via a lifetime mortgage product can be used to help fund a house move.  If you are considering moving into a new home, whether you are downsizing or increasing your borrowing there will be mortgage options for you to consider.  

If you are already retired or close to retirement, please get in touch today and we can discuss your mortgage options.  There are various products available and what we recommend will depend on lots of factors including your income, employment status, credit score, age, whether your property is in joint or sole names etc.  

Often, our older clients are considering a house move to be closer to family in retirement so they can provide help and support with grandchildren and later in life be closer for health reasons.  Nowadays, mortgages are much more flexible for older clients and options such as making repayments and overpayment are possible with most products.  

The proceeds of a lifetime mortgage can be repaid either by the sale of the property in the future on death or when the second applicant goes into long term care.   If you can afford to pay a monthly amount towards the interest this will save you a lot of money in the long term.  Our equity release advice team will run through all these options with you so you can see how this works.  

Equity Release Advice to Pay for Care

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A popular reason that clients to choose to release equity from their homes is to pay for care costs.  A good place to start would be to determine what care you are looking for, whether this is home care, assisted living or to move to a care home. 

An equity release plan, usually in the form of a lifetime mortgage, can provide a supplement to your income to afford your care costs.  Firstly, it’s best to know how much the care package you are looking for is going to cost.  

Secondly, our later life mortgage broker team will help you determine how much you can release from your home and how much the interest will be.   

It’s important to seek great equity release mortgage advice when considering releasing equity, there may be alternative products available to you, special product features designed to save you money, and any capital that you release may affect any state benefits that you receive.    

Equity Release Advice to Pay for Home Renovations

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Home or garden renovations can be paid for via an equity release mortgage if you’re over the age of 55 and if other funds are not available. Alternatives to consider before equity release are savings, personal loans or credit cards, a normal remortgage or grants that are available to older people to fund necessary home alterations.   

As part of our mortgage advice process, we’ll help you consider all these alternatives before recommending the best way forward for you.   

Whether you are looking for an extension, adding a new bedroom, fitting a new kitchen or bathroom, having your garden landscaped or something else we can explore your mortgage options. 

A good place to start would be to have an idea of how much your home renovations are going to cost but contact a reputable and recommended tradesperson for an all-inclusive quotation.  It’s always best to factor in an additional 5% to 10% for unforeseen costs that appear during the works. You don’t want to be in a situation where you run out of money.  

What type of later-life mortgage we’ll recommend will be based on lots of factors including your present and future income, credit score, amount of equity, amount you are looking to release and your monthly outgoings.  

Equity release in the form of a lifetime mortgage products can provide flexible features such as drawdown and the ability to make overpayments or interest payments if you can, both are designed to save you money by reducing the effect of compound interest. 

Speak with our later life mortgage advice team today about later life mortgages and equity release plans to see what’s possible.   

Equity Release Advice to Pay for Travel & Holidays

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Many older homeowners look to release equity to find leisure time such as holidays or travel.  The proceeds from an equity release mortgage can be spent however you like and can be taken either as a lump sum or smaller chunks.   

Nowadays, people are leaving work earlier and taking early retirement with a view to enjoy holiday time more.  Examples of using equity release advice for travel include buying a camper van, caravan or boat to spend more time with family.     

Before doing equity release, it’s important to consider all the other ways to fund your travel first such as by credit cards, personal loans, savings or a regular later life mortgage.   

Whether you fit the criteria for these other products will depend on factors such as both your current and future income and affordability.   

Our later life mortgage advice team will recommend the best way forward for you based on your personal situation.  

Equity Release Advice & Estate Planning

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Equity release can be used as part of a broader financial and estate planning advice.  We regular work alongside financial advisors who use an equity release mortgage as an estate planning tool.  

As part of our equity release advice process, we’ll ensure that you understand all the features and risks that are associated with the plan and recommend the best way forward for you.   

Equity Release Advice & Family Gifts

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Often, clients use an equity release mortgage to gift money to help family members out.  Usually, this is in the form of a lump sum to be used as a house deposit to help family members on to the property ladder.  

Usually, home buyers need between 5% and 10% deposit to buy a house and this can be a gift from a family member.  Also, sometimes it’ll be the case that the bigger deposit they put down the cheaper the mortgage deals will be.  

How much you will be able to release from your property will depend on your age, whether your house is in sole of joint names, how much equity you have and your income.  

Our later life mortgage advice team will ensure that the best product is recommended for your personal situation and that you understand the features and risks involved in doing it.  

A Recap of the Risks Associated with Equity Release

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Equity release is not without risk. Here are some of the risks associated with an equity release mortgage: 

  • The inheritance you leave to your family will be reduced.  
  • Equity release will reduce the amount you have available to you to pay for care costs in later life. 
  • If you opt not to make monthly interest payments, the interest will roll up on the plan and could increase significantly over time.  
  • Equity release could affect any means tested state benefits that you receive and could make you ineligible for future means tested benefits.  
  • Equity release is a long-term financial product and shouldn’t be used for short-term lending where alternative products such as bridging finance should be considered.  

Why use us for Equity Release Advice?

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  • We’re independent and can offer the full range of later life lending solutions to our clients including all kinds of equity release mortgages including regular mortgages, interest-only mortgages, retirement interest-only mortgages, equity release including lifetime mortgages and home reversion plans.  
  • We offer all our customers a free, no-obligation later life mortgage consultation where we’ll answer all your questions and recommend the best way forward for you based on your individual situation.  
  • We’re available daytimes, evenings and weekends to work around you and your family commitments.  
  • We’re happy to involve your family members if required in the conversations, if you’d like to do this, the earlier they are involved the better.
  • We’re members of the Equity Release Council and all the equity release products that we recommend meet their standard.
  • Peace of mind that our later life mortgage advisor is accredited with the society of later life advisors (SOLLA) which ensures you receive advice of a high standard. 

Finding you the right equity release deal

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Registered Address: 10 Consort Court, Hull, HU9 1PU.

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