Unlocking cash from your home: is equity release right for me?

Equity Release Options

At present, up to £340,000 equity per home is tied up in homes owned by people aged 55 and over. Equity release can be an effective way to unlock cash from your home. Of course, you should always consider your options carefully, so here’s our mini guide to unlocking cash from your home via equity release…

What is equity?

Equity is the market value of your home minus any debts secured against the property such as personal loans and mortgages. But the total equity available to you will depend on other factors such as age, health and the lender.

You must be able to meet a few qualifications before you can apply for equity release. If you’re aged 55 or over and your UK-based property is worth at least £70,000 then you are likely to qualify for equity release.

Your equity release options

  • Lifetime mortgages: You take out a loan on your property but you don’t have to make any monthly repayments. You will still own your home.
  • Home reversion plans: This involves selling some or all of your home in return for a cash sum, and you’ll live there rent-free.

When equity release could be a good idea

If, during your lifetime, you don’t want to downsize your home in order to unlock the cash from your assets then equity release could be a good option. This means you get to keep the family home while benefiting from the ‘unlocked’ cash from the property.

Equity release can be an effective option for those who are “asset rich and cash poor.” Put simply, this is where you have cash locked up in assets such as property, but you have a low income (such as a pension). When retirement is around the corner, equity release may help you top up your pension or help you to live a more lavish lifestyle in your later years.

In our experience, one of the most popular reasons for people taking out equity release plans is to help family members. For example, you may want to help pay for your child’s wedding, help with university fees or help them clear debt.  

Ask yourself what you want to gain from equity release

It’s definitely worth the while to ask yourself “What do I want to do with the cash?” There are many reasons as to why some people choose to release the equity of their property. One of the most popular reasons include using the money to go travelling and tick some items off the bucket list. Other reasons may include boosting disposable income, home improvements or leaving a tax-free inheritance gift to your loved ones.

Our team will provide helpful, independent legal guidance, in plain English, on how you can unlock access to your biggest asset – your home:

Speak to our team