Equity Release Mortgages

The final option open to many home-owners, is the equity release mortgage. This is the most drastic option but perhaps, the only option for some to finance their retirements.
Equity release has been around for a while, but many consumers have been wary about it in the past. Now, however, lifetime mortgages are regulated by the Financial Services Authority (FSA) and reversion scheme regulation is introduced in April 2007.

Equity Release Mortgage information brochure (PDF)

How Equity Release Mortgages Work

Equity release mortgages can provide you with a regular income, or a cash lump sum. In return, you take out an interest-free loan which is paid off when the property is sold on your death. Or you can choose to sell a proportion of your home in return for the money. The first type of equity release mortgage is known as a lifetime mortgage, while the second is called a reversion scheme.

Pros and Cons of Equity Release Mortgages

• + Allows you to free up cash.
• + Increased competition means interest rates are falling.
• + Enables you to stay in your own home.
• + Can cut the inheritance tax bill faced by your estate.
• - A big commitment
• - Will reduce the inheritance you leave your family
• - Can impact on State benefits

If you wish to find out more about finance options, one of our managers would be happy to discuss your options in strict confidence.