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You may have heard about equity release. Perhaps you have thought about doing it, but don’t understand how it works.
Maybe you were put off thinking “if it sounds too good to be true, it probably is”. Right away, let us assure you that equity release is completely legitimate.
Moreover, by using equity release, you get to fully enjoy your retirement – comfortable in the knowledge that you can still leave plenty for the ones you love.
Despite having a different name, the most popular form of equity release is simply a kind of mortgage called a Lifetime Mortgage.
Like a traditional mortgage, the amount you can borrow – tax-free - depends on the value of your home. However, unlike a normal mortgage, you don’t have to make monthly repayments – or any repayments at all – during your lifetime unless you wish to do so. The amount you borrow, plus interest, is only due after the last homeowner passes away or enters long-term care.
But don’t forget, whilst your retirement could be more comfortable thanks to the equity you release, the value of your home is likely to increase too.
How much tax-free cash could you release?
Just a few more details are needed to send you your free guide.
So far, so good! Based on the information you have supplied so far, it looks like equity release could be an option for you.
At age 65, a homeowner with a property value of £450,000 decides that they would like to release £150,000 of tax-free cash.
At the current market rate, they receive an interest rate of 4.69%*. Over 25 years, their mortgage balance grows to a total of £471,760.
This homeowner chose Your Choice, who is a member of the Equity Release Council, which means that they are protected by a no-negative-equity guarantee and no matter what, they would never owe more than the value of their home.
However, their property value has also increased in this time.
Imagining that property prices increase at an average rate of 2.5% over 25 years, their home would now be worth £738,273.
That means that even after the loan is paid back, this homeowner will still have £266,513 of equity in their property when it is sold. They will still be able to gift that all-important inheritance to their family, or perhaps donate money to a charity of their choice.
Of course, this is just a prediction. House prices could increase more or less during those 25 years, and have in fact grown by 10.5% in the year leading up to May 2022**.
The homeowner would also have the option to reduce the total cost of their loan by making early payments to the interest or total cost of the loan, leaving even more value in their home.
A Lifetime Mortgage is truly a flexible option, and it can be completely unique to your requirements.
Some people don’t like the idea of borrowing money.
They’d rather move to a cheaper property and use the difference to help fund their retirement.
Let’s run with the idea that our ‘won’t borrow’ couple live in a house worth £500,000, and they want an extra £100,000 to spend.
However, once they pay for estate agent fees, stamp duty, a house survey, removal costs and other legal fees, they are only left with £88,000 to spend. Bear in mind, these are example costs based on estimations and may vary between providers.
If they used equity release, they could have released the full £100,000, and maybe more.
Aged 64 and 65, Barbara and Paul wanted to boost their retirement income, so they sold their family home of 42 years. The 3-bedroom semi-detached home was where Barbara and her brother had been brought up.
To get the cash they needed, Barbara and Paul downsized to a 2-bed bungalow in a different town. The property is nice and has increased in value since they have owned it. But they are 16 miles away from their children and their families and had to make friends all over again.
Barbara hates not being able to see her family as often as she would like to, and Paul misses the lovely garden they once had which was his sanctuary.
Equity release makes your money work for you. Not only do you get extra money for a better retirement, but you will also have an inheritance left to leave your loved ones.
Equally as important, you don’t give up your home full of memories. If they had decided to release equity, Barbara and Paul could have kept their beloved home and still achieved their goals.
If what you’ve just read has piqued your interest, your next step is to get some advice and figures based on your personal circumstances.
Please know that equity release is a specialised area of personal finance, so ensure who you speak to is a registered expert in the field.
Over and above your due diligence, there are other things that need to be considered.
It goes without saying that you would want personal, 5-star advice.
But you understandably would also want your fully qualified adviser to stay with you throughout the process, not be passed from one department to another. This usually results in you feeling like you’re in a seemingly endless cycle of having to repeat yourself and getting to know new people.
“When you hear how easy it is you never believe it. But seriously it was really so easy yet professional. I had a guy called Rob Ashurst who looked after me, he was excellent and could not fault his support and advice. I would have no hesitation in recommending him and Your Choice equity release.”
Ms. Anderson, Liverpool, England
Whilst you may want the company to be large with nationwide coverage, having a local adviser means it’s easy to meet them and that they really understand the property market in your area.
Finally, you’re making an important decision affecting the rest of your life. So, it should be you who dictates the pace of the process – not someone pushing from the outside.
Your Choice Equity Release work exactly like this.
Whilst you may not have heard of us before, the people behind Your Choice have over a decade’s worth of experience in providing an award-winning service. We also work with Canada Life, one of the most established and trusted equity release lenders in the country.
Our expert advisers will be with you every step of the way and help you to understand how equity release will reduce the value of your estate, and check if releasing equity could impact your entitlement to means-tested benefits.
“Richard Johnson was my Equity Release advisor, who I can genuinely say, did a thoroughly professional job in keeping me informed, raising the pitfalls, as well as the advantages of the various options, and monitoring the paperwork throughout this process. I do not normally write reviews, unless I feel the service was exceptional.”
Mr. Sharratt, Cumbria, England
It depends if you would like to release the funds all at once, or over a period of time. Whether or not you want to take all the money at once to enjoy your retirement is one of the areas which can help you to make the right decision, as well as other areas of your personal circumstances.
This is why it’s important to speak to expert advisers like those here at Your Choice.
If you choose to proceed, you will have a second pair of eyes check and approve your application for your 100% concrete reassurance.
Your Choice is extremely well placed to help you choose the right equity release plan for you.
With an equity release calculator, there’s no credit check to use it and make an enquiry.
How much you can borrow is determined by two main factors:
In some cases, your health may also have an impact.
To give you an idea of the amount you can borrow, Your Choice have created this simple to use equity release calculator.
In less than a minute, discover what’s possible for you.
If you complete a calculation, you will also receive a free copy of our guide to equity release.
In this comprehensive 24-page guide, you will discover:
…and more!
With equity release, you can now:
Use our equity release calculator or get in touch with Your Choice Equity Release on: 0800 041 8044
Alternatively, you can click the below button to schedule a call at a time that suits you:
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