Equity release

It’s a long-term loan secured against the value of your home, which you can apply for any time after you turn 55. You’d borrow a cash lump sum, but there are no monthly payments. Instead, interest builds up for as long as you have the mortgage and is charged on the total amount borrowed and the interest already added. This quickly increases the amount you owe.

When you (and your partner, if you’ve taken it out jointly) pass away or need to go into long-term care, subject to our terms and conditions, the loan and any interest that’s built up is paid back – normally using money from selling your home.

You need to know that taking out any type of equity release means you will leave a lower amount behind to loved ones. It may also have a tax impact and affect whether you can still claim certain welfare benefits.

Our free guide has more details that will walk you through the benefits and risks of the lifetime mortgage we offer.

Before we start zooming in on the smaller details, let’s stop to check if a lifetime mortgage is possible for you. For starters you’ll need to:

• Be at least 55 – and that applies to each homeowner
• Own a home in the UK, not including the Isle of Man or the Channel Islands
• Own a home worth £75,000 or more
• Want to borrow at least £15,000

Find out more about whether you’re eligible for a lifetime mortgage.

Yes. As an equity release provider, we’re regulated by the Financial Conduct Authority (FCA). We’re also a member of the Equity Release Council, and follow their standards for protecting customers.

If you take out a lifetime mortgage with us, we also promise that you or your estate will never have to pay back more than your home can be sold for, as long as it's sold for the best price reasonably obtainable.

You can also read our answers to other common equity release concerns. And we know you might come across a lot of unfamiliar terms when you're looking into equity release, so we've pulled together an equity release glossary to help you understand it all better.

It’s important to look at everything before you apply for our lifetime mortgage – the great bits and the not-so good things.

Pros

• You'll still own your home
  You're the full legal owner of the property – that doesn't change.
• You won’t be leaving your family with the debt
  Because of our no negative equity guarantee, your loved ones will never have to repay more than the money received from the sale of your property, provided that it’s sold for the best price reasonably obtainable.
• You can leave a little – or not so little – something behind
  Set aside a percentage of your home’s value to leave for family – it just means you can borrow less (the minimum you can borrow is £15,000)
• An interest rate just for you
  We tailor our interest rates to each application so it’ll be unique to your personal situation.
• Take a little here and pay a little there if you need
  We let you choose to take a one-off lump sum or a smaller cash sum with a cash reserve to dip in to. You can also choose to make limited repayments during the term of the lifetime mortgage, if it suits you to do so, subject to our terms and conditions.
• We only charge interest on money you’ve taken out
  If you set up a cash reserve, no interest will build up on money sitting there, until you withdraw it. We’ll set a new interest rate for each amount you take out, so your initial lump sum and any later withdrawals will have their own rate.
• Our lifetime mortgage can move with you
  You can transfer your lifetime mortgage to a new home, as long as it’s a type of home we can lend on at the time.
• Be protected if you downsize later
  Should you move to another property later which you can’t transfer your lifetime mortgage to, you may be able to pay it off in full with no early repayment charge, thanks to our downsizing protection. You must have had your lifetime mortgage for three years or more before you can use downsizing protection.

Cons

• You’ll be paying back a lot in interest
  Interest is charged on the total amount borrowed and the interest already added, so the amount you owe goes up quickly.
• Leaving less behind
  Even if you set aside a percentage of your home’s value for your loved ones, paying off the money you’ve released (plus any interest) will still mean you’re leaving them less in inheritance.
• It may have a tax impact and affect certain benefits
  Taking cash out of your home through a lifetime mortgage could have tax implications or affect whether you’re eligible for certain welfare benefits. Your equity release adviser will go through all of this with you.
• It’s a big decision, and a lifetime commitment
  Our equity release is designed to last for the rest of your life – or until you need long-term care. If things change and you want to pay this off sooner, there may be a big early repayment charge.
• You’ll need to get legal advice
  There’ll be a cost for this, which you’ll need to pay yourself

A straight-forward lifetime mortgage application with us should take around 8 to 10 weeks. That's from when you first apply to the money landing in your bank account. We’ve put together a stride-by-stride outline of how this could unfold, and you can read more about the application process here.