April 1, 2024

Equity release for later life planning

 Equity release is a way to access the value tied up in your home, providing access to funds without having to sell or move home.

What is the criteria for anyone considering equity release?

It's available to those aged 55 and over, who own their property outright or have minimal mortgages remaining.

For what reasons do people consider equity release?

There are a number of considerations why people consider equity release later in life.

From paying for care, consolidating debt, home improvements for a more comfortable retirement, gifting loved ones to get onto the property ladder, a new car, holidays, or to simply have a supplemented income,especially if you’re feeling the cost of living pinch.

There are two main types of equity release products: lifetime mortgages and home reversion plans. What’s the difference?

Lifetime Mortgages: This option allows you to borrow against your property's value while retaining ownership. You can receive a lump sum or regular payments. The loan is repaid upon death or permanent long-term care,typically from the sale of the property.

Home Reversion Plans: With this plan, you sell all or part of your property to a provider while retaining the right to live the rerent-free. The provider will purchase a portion of your home, and upon sale, proceeds are divided according to ownership proportions.

Despite offering financial flexibility, there are several factors to consider when it comes to equity release:

Cost: Interest rates on equity release may be higher than traditional mortgages.

Term: Lifetime mortgages have no fixed term, and interest rates remain constant. Additional borrowing will have its own interest rate.

Value of Home: Reversion plans may undervalue your property compared to its open market value.

Future Needs: Accessing equity now may impact future financial plans, such as long-term care or inheritance.

Flexibility: Moving home or downsizing may affect your equity release terms, and schemes can be complex.


Not forgetting that equity release may affect any state benefits you get, and could incur additional fees like a traditional mortgage(such as arrangement fees and early repayment charges).

Putting all that aside, equity release can be a flexible financial option later in life. As mentioned earlier, from paying for care,consolidating debt, home improvements, gifting loved ones to get onto the property ladder, a new car, holidays, or to simply have a supplemented income.Your financial wellbeing and happiness matters, especially in your retirement years.

Equity release is a very personal decision that requires consideration from a whole of market mortgage professional that can assess your circumstances, goals, and alternatives. An adviser will ensure you're commendations are tailored, and they’ll ensure you fully understand the implications and costs involved.

Willow Tree Financial Services don’t advise on Equity Release, your enquiry will be referred to a trusted adviser in the Quilter Financial Planning Network. Your home may be repossessed if you do not keep up repayments on your mortgage.

Equity Release, including Lifetime Mortgages and Home Reversion Plans, will reduce the value of your estate and can affect your eligibility for means tested benefits.

External Link
You are now departing from the regulatory site of Willow Tree Financial Services. Neither Willow Tree Financial Services Nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.