Equity Release London

While equity release can provide a number of benefits, it also carries risks that individuals should carefully consider before making a decision.

One of the key benefits of equity release is the ability to access a lump sum or regular income without having to sell your property. This can be particularly advantageous for people over the age of 50 who may have limited pension income or require funds to support their lifestyle or pay for healthcare expenses. Additionally, equity release can provide a sense of financial freedom by allowing individuals to use their property as a source of wealth.

However, there are several risks associated with equity release. Firstly, it can significantly reduce the inheritance that can be passed on to loved ones. Since equity release involves borrowing against the value of the property, the debt plus interest will accumulate and reduce the value of your property over time. Furthermore, the interest rates associated with equity release can be higher than traditional mortgages, dependent upon the loan-to-value taken, which means that the overall cost of borrowing could be higher.

Another risk is the potential impact on means-tested benefits. Releasing equity from a property could affect eligibility for certain state benefits, such as pension credit or council tax support.

Ultimately, before considering equity release, individuals should seek advice from a professional equity release adviser, carefully weigh the potential benefits against the risks, and explore alternative options to ensure that you make an informed decision that aligns with your circumstances and long-term financial goals.

Equity is the difference between the value of your home and the amount you owe on your mortgage, and the amount of equity you can release from your home depends on several factors, namely the current value of your property and the outstanding mortgage balance.

Typically, with a lifetime mortgage, you can release a percentage of the property's value, usually between 20% at age 55 up to around 55% at age 90. This can also be dependent on your health, postcode and your property type in London. Alternatively, home reversion plans, do not incur any interest as it involves selling a portion or all of your property to a provider while retaining the right to live there.

To determine the maximum amount of equity you could release, our FCA regulated equity release advisers will assess your specific situation. They will consider factors such as your age, creditworthiness, location, and the type of equity release product that best suits your individual circumstances and needs.

Choosing the right equity release plan requires careful consideration of your individual financial circumstances and goals.

A lifetime mortgage, for example, allows you to borrow against the value of your home while retaining ownership. You can receive a lump sum or regular payments, and interest accrues on the loan. The loan, including the accumulated interest, is repaid when you sell the property, move into long-term care, or pass away.

A home reversion plan, however, involves selling a portion or all of your property to a provider in exchange for a tax-free lump sum or regular income. You retain the right to live in the property rent-free for the rest of your life or until you move into long-term care. When the property is sold, the provider receives their share of the proceeds.

Our London based equity release advisers will provide valuable, unbiased guidance tailored to your situation, ensuring you make an informed decision around your financial future.