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Equity release frequently asked questions

Welcome to our frequently asked questions page. Here you will find answers to some of the most common questions that our customers have about equity release products. We hope that this page will help you find the information you need quickly and easily.

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What is an equity release broker?

Responsible Life is what is known as a broker. What this means, is that we introduce homeowners to the lenders that offer the right product for them. Our advisers will work with you to understand your needs and circumstances, and then work to find the product and deal that will work for you. We have access to a wide variety of deals and can conduct the research on your behalf, so you don't have to.

It's important to engage with a broker like us when you are considering equity release, as the products can't be accessed without consultation with an adviser.

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How much will it cost me to release equity from my property?

How much it costs to release equity will depend on several factors, including the value of your property, the age of the youngest homeowner, and the amount of equity that you choose to release.

We understand that evaluating the cost can be a complex process, so we've created a comprehensive guide to the costs. Our specialist advisers are also available to help you find the right product and interest rate to suit your needs.

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What if I want to move home in the future?

All of the Lifetime Mortgage products that we offer will meet the standards of the Equity Release Council. This means that you will be guaranteed the right to move home and take your Lifetime Mortgage with you. However, it will depend on the lender's criteria as not all properties will be suitable for equity release. Additionally, you might need to repay some of your loan if there wouldn't be enough equity left after a sale. You should always speak to your adviser again if you start to consider moving home in the future.

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Will equity release affect my benefits?

Yes, equity release could affect your entitlement to means-tested benefits. It might be possible to structure your release so that you can avoid affecting your entitlement, such as by using a drawdown. With a drawdown, you don't release all of the equity available to you in one go, so that you're not borrowing more than you need. Your adviser will explain this and any potential impacts that releasing equity might have before you choose to proceed.

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Do I pay tax on equity release?

No, you don’t pay tax on equity release. This is because you are unlocking the value that you already own in your home, rather than earning a new income.

However, if you choose to make a gift to your loved ones, inheritance tax could be due should you die within 7 years of making the gift. Your adviser will be able to help you to explore this further.

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Why do I need to seek equity release advice?

Equity release is not right for everyone and there may be other options that are more suitable for you. Therefore, it is important to get advice from one of our qualified experts before taking out equity release.

Our advisers all have relevant qualifications and are members of the Equity Release Council, which sets additional rules and principles for its members to follow. Our advisers abide by a no-pressure guarantee and will only recommend a product if one is suitable for you. You will only have to pay an advice fee, currently not exceeding £1,690, if you choose to proceed with Responsible Life and your case completes.

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What if I need to move into long-term care?

If you need to move into long-term care and you are the last homeowner on the mortgage, you will need to repay the equity that you released. This will usually be achieved with the sale of the home.

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What happens when I die?

Equity release works on a ‘final survivor’ basis, so what happens when you die will depend on whether you are the last homeowner on the deeds.

If you are the last homeowner, then your estate must notify your lender of your passing. This will trigger the repayment phase, where they will typically have up to 12 months to repay the mortgage. This is usually done by selling the home.

If you’re not the last homeowner, then the surviving borrower does not need to do anything as the Lifetime Mortgage will continue. However, some lenders may allow them to clear the mortgage without an early repayment charge if they decide to move out of the home within a certain period following death.

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What happens to my inheritance plans?

Taking out equity release can have an impact on your inheritance plans, as it will reduce the value of your estate and the amount of money you can leave to your beneficiaries. However, there are some ways to mitigate this effect and still provide for your loved ones.

One way is to choose to make partial repayments of the loan or interest, either regularly or ad hoc. All new Lifetime Mortgage products guarantee the right to make optional payments, so you can reduce the amount of debt that accumulates over time and the interest that is added to it.

Another way is to use the money you release from your home to make gifts to your family members while you are still alive. This can be a way of giving them a “living inheritance” and help them with their financial needs, such as buying a house, paying for education, or starting a business.

Some products can also offer what is known as an inheritance protection guarantee. With this, you can ringfence a portion of your home's value to guarantee you something to leave behind. If you do choose this feature, it will reduce the amount of equity that is available for you to release. This is because the calculation of how much is available will be done based on a lower property value. For example, let's say that you have a property worth £300,000 and choose to ringfence £20,000 of it. The equity release calculation would be completed on a property value of £280,000 instead.

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Can I remain in my home?

Yes, you can remain in your home. With the equity release products that we offer, you are guaranteed to be able to remain in your home. Only when you move into long-term care or pass away will your Lifetime Mortgage need to be repaid. The home is usually sold to achieve this.

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What is the Equity Release Council?

The Equity Release Council is a trade body that represents the equity release sector in the UK. It aims to promote high standards of conduct and practice in the provision of and advice on equity release products, which allow homeowners aged 55 and over to release money from their property without having to make any monthly repayments.

The Council also works to protect the interests of consumers and to raise awareness of the potential benefits and risks of equity release. The Council has a set of rules and principles that its members must follow, which include providing clear and transparent information, ensuring independent legal advice, offering a no-negative-equity guarantee, and allowing customers to move to another suitable property.

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Am I eligible for a Lifetime Mortgage?

If you’re over the age of 55 and own a home worth at least £70,000, you could be eligible for equity release. Use our free online calculator and speak with our Information Team to find out more.

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What is equity release?

Equity release is a way of releasing some of the cash from your home without having to move. It is available to UK homeowners aged 55 or over who have a property worth at least £70,000. The most popular equity release product is a Lifetime Mortgage.

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Can I release equity when I have a mortgage?

Having an existing mortgage doesn’t have to stop you from releasing equity. While it is true that you can’t release equity and keep your current mortgage, it is possible to use equity release to pay it off. In fact, that is one of the most popular reasons for people to choose to release equity.

Have you got any other questions?

Do you have any other questions or want more detail on the answers given here? Give the friendly Information Team a call and they can help. If you’re ready to find out how you much you could release from your home, use the free online calculator today.