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What is equity release?

Equity release is the act of releasing money that is held within the value of your property while you're still living there. It can help homeowners over the age of 55 achieve a variety of goals, from gifting an early inheritance or improving your home, to clearing an existing mortgage. We're here to help you decide if this is right for you.

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How does equity release work?

Equity release is the process of turning your home’s value into tax-free cash in the bank. At Responsible Life, we offer advice on the most popular product, a Lifetime Mortgage. With this, you can borrow from the value of your home and enjoy the freedom of choosing whether to make payments in your lifetime. The full amount borrowed, plus interest, is only repaid when the last homeowner passes away or enters long-term care. To find out more details download our guide to the equity release process.

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What are your options?

When releasing equity, you will benefit from fixed interest rates and optional payments as standard. Additionally, you will never owe more than your home's value with a Lifetime Mortgage. When discussing with your adviser, there are two main product options to consider. These are either a lump sum or a drawdown product.

Lump Sum Lifetime Mortgage

With this type of equity release, you can access some of the equity from your home in one go. The interest rate will be fixed for life, and be added to the full amount borrowed over your lifetime. You can use the money that you release in a variety of ways, and live the life you deserve.

The full amount borrowed, plus any interest unpaid, will be paid back after you pass away or enter long-term care.

Drawdown Lifetime Mortgage

Enjoy flexibility and control with this option! It allows you to take some of your money from your home now, and save the rest for later. You'll have a reserve of cash that doesn't charge any interest until it is used. You can access the reserve in the future by contacting your lender.

As with a Lump Sum product, only the amount actually borrowed, plus interest, will be paid back after you pass away or enter long-term care.

Points to ponder when considering equity release

If you want to access some of the money tied up in your home, a Lifetime Mortgage is not your only option. There are other types of equity release products and alternatives that might suit your needs better. For example, you could consider a Retirement Interest-Only Mortgage or a traditional mortgage. You could also explore other ways to fund your plans for later life, such as downsizing to a smaller property or using your savings.

Your Responsible Life adviser will help you compare the pros and cons of each option and advise you on the best choice for your situation.

For more information on these options just click the button below.

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Equity release advantages

  • The cash released is tax-free.
  • Payments are voluntary.
  • Interest rates are fixed for life.
  • Never owe more than your home is worth.
  • Enjoy a variety of flexible features.

Things to consider

  • Your estate’s value will be reduced.
  • Your entitlement to means-tested benefits may be affected.
  • Interest increases on a compound basis.
  • There are early repayment charges if you want to pay it all back early.