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Top 5 reasons people choose equity release

Article | Jun 2024

For homeowners over the age of 55 there are some powerful financial tools available to help raise extra money. One of these financial tools is equity release, which could enable property owners to unlock some value from their home and receive a tax-free lump sum.

There are different types of equity release, but Responsible Life’s main area of expertise is Lifetime Mortgages. With this option homeowners can benefit from having interest rates fixed for life. They also have the comfort of knowing that they will never owe more than the full value of their property.

If you have been researching equity release you will have learned all the advantages of releasing equity from your home. You can use Responsible Life’s free equity release calculator to work out how much money you could be able to release from your property.

In this article, we will breakdown the top 5 reasons people choose equity release. This could give you plenty of inspiration for how you could make the most of unlocking value from your home through releasing equity.

Gift early inheritance

When people ask the question ‘is equity release a good idea?’, one of the benefits that comes up is the possibility to help family members. You can use the money that you receive from releasing equity in your home to gift an early inheritance to your children or loved ones.

In 2024 it is as difficult as ever for young people to get onto the property ladder, fund dream gap-year holidays or just save for their futures. However, by opting for equity release you could free up funds that they would inherit from your home once you pass away early.

Gifting early inheritance through equity release funds could help ensure you have peace of mind that your loved ones are able to buy their first home. You could also benefit from being here to see the joy that your gift can bring when they might need it most.  

Buy a second property

Another popular reason people opt for equity release is because it provides a way to fund the purchase of a second property. Perhaps you are wanting to buy a holiday home for you and your family to enjoy in the summer months. This could be achieved by releasing equity from your property.

Buying a second home with your equity release funds could also be another way to help your children get on the property ladder.

Using equity release to buy a second property offers a flexible means of remortgaging to fund it. All Lifetime Mortgage products offer the option for voluntary early payments, the form they take being subject to the lender's criteria.

Fund a dream holiday

One reason people choose equity release is to provide themselves with the funds needed to afford a dream holiday. If you have always wanted to go on a long cruise or visit the world’s most picturesque locations, you could achieve this by releasing equity from your property.

Many of the homeowners Responsible Life have advised around equity release have gone onto enjoy dream holidays with their extra financial resources.

Pay off existing mortgages or debts

Having the ability to pay off an existing mortgage or any outstanding debts is another reason why people choose equity release. By unlocking some of the value in your property you could ensure that you pay off the mortgage, and then the amount borrowed, and interest, can be paid back once you pass away or enter long-term care. This is usually achieved with the sale of the home.

Responsible Life’s equity release advisers will be able to provide any information you need about using equity release funds to pay off a mortgage or any debts. They will also help you to assess the pros and cons, exploring the fact that releasing equity will reduce the value of your estate and potentially affect your entitlement to means-tested benefits.

Make home improvements

Should your home be needing any improvements you could use equity release funds to make them. Making improvements to your home could end up raising the value of the property. It would also help to make your life more comfortable and make your home an even better place to be.

From future-proofing your home to ensure it remains suitable for all stages of life, to seeking out the very best in smart home technology, you could achieve the home of your dreams with equity release.

Need more information?

If you have a goal in mind and think that equity release could be the right way to achieve it, schedule a call with our Information Team today! They can answer your questions and arrange a consultation with one of our equity release advisers.

You could also call them direct today on 0800 048 5807. We look forward to helping you achieve your goals.

By consolidating your debts into a mortgage you may pay more over the entire term than with your existing debt. Speak with an adviser to understand whether equity release is right for you.

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