11 reasons why you might consider Equity Release

This week, we look at some of the main reasons we have found clients seek to release equity from their homes.

If you own your own home and are looking to raise extra funds, equity release could be an option.

Why you might consider Equity Release


  1. You do not want the upheaval of moving

One way to free up some of your housing wealth is to downsize to a cheaper, smaller property. However many of our clients  want to stay in their family home at retirement, or cannot face the upheaval and stress of a move.


  1. You need to repay a mortgage

Many homeowners use Equity Release as a way to clear debts or outstanding mortgages. Equity Release saves the burden of monthly mortgage repayments and you are free to use your funds as you wish.


  1. You could have access to tax-free cash when you need it

With a Lifetime Mortgage you can release as little as £10,000 tax-free initially and leave funds in reserve for when you need it. You retain full ownership of your home – you’ve just borrowed against it.


  1. You need funds for home improvements or to help family and friends

Finding a big lump sum in retirement can be challenging if you do not have savings available. Many people turn to Equity Release to pay for items like home and garden improvements or to help their children financially. One in five retired homeowners release equity to help out family, according to recent research by equity release specialists ‘responsible for equity release’.


  1. You could be more financially secure

Releasing some of the equity from your home can make a large difference to your day to day life. It can help pay towards travel, food, bills and other living expenses.


  1. You could pay for that dream retirement

Why not use some of the money you release to have the holiday of your dreams? Or to afford those luxury purchases such as a new car.


  1. You know what you are being charged

With an interest rate that is fixed for life, you know exactly what the costs are.


  1. Your home remains your own – for as long as you like

With a Lifetime Mortgage you retain full ownership of your property. The Mortgage, along with any accrued interest, is only repaid when the property is no longer your primary residence.


  1. You will never owe more than the value of your property

Regardless of what happens in the future, you can never owe more than the value of your property. It is also important to note that no debt will ever be passed down to your heirs.


  1. You want to top-up your monthly income in retirement

You do not have to use the proceeds from Equity Release to fund a large purchase or pay debts – many pensioners use this type of scheme, simply to top-up their monthly income. For example drawdown plans, which tend to be the most popular type of Equity Release Scheme, enable you to drawdown money in stages, as and when you need it. You are only charged interest on the actual funds you release, helping keep costs down.


  1. Rates are lower than they have ever been

Equity Release rates are typically a few percentage points higher than standard mortgage rates but have fallen to record lows in recent months. Bare in mind, however, the interest charged by Equity Release Schemes rolls up and is compounded, which means the amount that interest is charged on, increases as time goes by.

If you have any questions regarding this article, please do get in touch.

We are here to help.

Speak with our Financial Planners today

Related blog posts

Economic Review – August 2022

The latest gross domestic product (GDP) statistics show the UK economy grew unexpectedly in May although forward-looking indicators still point to a deteriorating outlook. In…

Read More

Economic Review – July 2022

The latest gross domestic product (GDP) statistics show the UK economy unexpectedly shrank in April, increasing concerns about future growth prospects. In our economic update…

Read More
businessman checking stock market on tablet

Investment market update: July 2022

The ongoing war in Ukraine, rising interest rates and soaring inflation could be pushing some economies towards recession in the coming months. This uncertainty has…

Read More

Wealth Management for Entrepreneurs and Executives

  The wealth management market is very much segmented and filtering through this to assess the best service, relationship, cost, security, and breath of offering…

Read More

Why use a Financial Adviser?

  In our case study below, we run through the scenario of some new clients who thought they could manage their portfolio themselves. However eventually…

Read More

How do you find a lost pension?

  Research by the Association of British Insurers (ABI) conducted in 2018 found there were approximately 800,000 lost pensions in the UK which amounted to…

Read More
Coming to a crossroads in life

Financial Planning as a result of selling a limited company

Selling shares in a construction company John had a business in construction that he owned with two co-directors. They decided to sell the business as…

Read More

Planning for Retirement

Self-employed, with a number of pensions Spencer is 65 and lives in Worthing with his wife.  He is a self-employed carpenter. Spencer came in to…

Read More

Michael and Mandy

Michael and Mandy are 46 and 43 respectively, and own a business in Worthing. They were in the process of buying the business from the…

Read More