The basics
How old do I need to be?
You need to be at least 55 to take out a lifetime mortgage. The amount you can release generally increases with age, because the plan is expected to run for a shorter period.
Do I still own my home?
Yes. With a lifetime mortgage you keep ownership of your home and carry on living there.
Do I have to make monthly repayments?
Not usually. Most lifetime mortgages let the interest build up, with the loan repaid when you die or move into long-term care. Some plans let you make optional payments, which can reduce the total cost.
Could I owe more than my home is worth?
Not with an Equity Release Council member. Their standards include a no negative equity guarantee, so the amount you or your estate repay can never exceed the value of your home.
What will it cost to get advice?
The initial conversation is free. If you decide to go ahead, my fee is £899, and I'll confirm it in writing before you commit to anything.
Costs and repayments
What interest rate will I pay?
Rates vary between lenders and plans, and change over time. Equity Release Council standards require the rate to be fixed or capped for life, so you'll know the most it can be. Your personalised illustration shows the rate and the total cost.
How quickly will the loan grow?
If the interest is added to the loan, it can grow quickly, because interest is charged on the interest that has already built up. Paying some or all of the interest, where the plan allows it, slows this down. The calculator gives you an illustration.
Are there costs other than interest?
There can be arrangement, valuation and legal fees, and a plan may charge you if you repay it early. My own fee is £899, confirmed in writing before you go ahead. Your personalised illustration should set out every cost.
Can I repay the loan early?
Usually, yes, but most plans charge an early repayment charge, which can be substantial. Some plans allow limited repayments without a charge. Ask about early repayment charges and any repayment allowance before you decide.
Can I take the money in stages?
Yes. With drawdown, you take an initial amount and keep a reserve to draw on later, and you only pay interest on what you've taken. There's more on the lifetime mortgages page.
What can I use the money for?
Most plans let you use it as you wish. Common uses are home improvements, clearing a mortgage or debts, helping family, and topping up retirement income. We'll talk through whether it suits what you have in mind.
Will it affect my benefits?
It can. Money you release may count towards means-tested benefits, such as Pension Credit. It's important to check before you decide, and I can talk through how it might affect you.
Your home and your family
Can I still move house?
Equity Release Council standards include the right to move to another suitable property, subject to the lender's criteria. In practice the plan may be able to transfer to your new home, or you can repay it. Check the terms of any plan first.
What happens when I die or move into long-term care?
The loan and interest are repaid, usually by selling the home. Anything left goes to your estate. With a no negative equity guarantee, your estate will never owe more than the home is sold for.
Will my family inherit less?
Yes. The loan and interest are repaid from your home, so there's less left for your family. Inheritance protection can set aside a share for them, but it reduces how much you can borrow. It helps to talk to your family early, and they're welcome to join our conversations.
Can I release equity if I still have a mortgage?
Usually, yes. Your existing mortgage is repaid from the money released, and you receive what's left. You can include it in the calculator.
Advice and next steps
Do I need to travel to see you?
No. I work with clients remotely, so you can talk to me from home. A few steps involve other people, such as the lender's valuation of your property and seeing a solicitor, and I'll explain how each one works.
Do you advise on all types of equity release?
No. I advise on lifetime mortgages only. If a lifetime mortgage isn't right for you, I'll say so and talk through the alternatives.
Do I need to see a solicitor?
Yes. Equity Release Council standards require you to take independent legal advice from a solicitor before you go ahead. It's a safeguard for you.
How long does it take?
Usually a matter of weeks from application to funds, depending on the lender and the solicitors involved. There's no need to rush, and you can take as long as you need to decide.
Is equity release regulated?
Lifetime mortgages are regulated by the Financial Conduct Authority, and Equity Release Council members follow additional standards. Avalon FS Ltd, the firm I advise through, is authorised and regulated by the FCA and is a member of the Council. The details are in the footer of every page.
Still have a question?
Ask me. The first conversation is free, with no obligation.