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Before you think about equity release, you should consider other options first, like moving to a smaller property or one of a lower value. You may also have other savings and assets that could help fund your retirement.
However if the above does not work for you then you might try an equity release plan. These plans release capital tied up in your home to supplement your finances. Thousands of people in the UK already choose this method to supplement their retirement income.
Equity release allows you to release cash from your property without the upheaval or expense of moving home but you need to be a UK homeowner aged 55-95. The money you release can be spent in any way you like and what’s more, there are typically no monthly repayments to make. There is no need to worry about the longer term as you can stay in your home for life or until you decide you want or need to move.
There are many different equity release plans on the market, so it’s vitally important to seek expert advice.
There are two main types of equity release plan:
A Lifetime mortgage is secured on your property and you receive that amount as a tax-free lump sum. You do not usually make monthly repayments but the interest rolls up and the loan plus interest is repaid after your death, when the property is sold.
A Reversion plan enables you to sell all or part of your home in return for a tax-free lump sum and a guaranteed lifetime lease, with no monthly repayments to meet. After your death the house is sold, so the lender gets back its percentage share.
*This is a lifetime mortgage. To understand the features and benefits, ask for a personalised illustration.