What is Equity Release?

Equity release has become a popular way for homeowners to release money from the value of their home. A lifetime mortgage is the UK’s most popular form of equity release. It allows you to receive a portion of your home value, tax-free. This amount can either be received in regular payments or as a lump sum. The equity which has been taken is only repayable upon your death or when you move into long term care. 

Many find that tax-free equity is a beneficial way of allowing them to achieve their life goals. From remodelling to helping children get on the property ladder, equity release is a convenient way to receive capital.


There are several common misconceptions surrounding equity release. These concerns often prevent people from experiencing the benefits of a lifetime mortgage.

If I take out an equity release mortgage, I will no longer own my home:

Equity release is a mortgage which is secured on your property, allowing you to retain full ownership. With lifetime mortgages you are still the legal owner of your home and are only bound to repay the loan on the death or long term care of the borrower. 

Equity release isn’t safe:

Many people still believe that equity release is an unregulated industry. All equity release advisors, brokers and providers are regulated by the Financial Conduct Authority. The regulator provides rules and guidance that must be adhered to.

You cant move:

Depending on the terms of your plan, many equity release providers can transfer your loan to your new property.

I have a mortgage so I am not eligible for equity release:

Subject to the amount outstanding on your mortgage, it may not impact your ability to release money from your home. In fact, paying off a mortgage is one of the most popular reasons for equity release. Using equity release to pay off a mortgage means that you no longer have to worry about bothersome monthly mortgage payments.

My children will inherit debt

A negative equity guarantee is attached to equity release plans. If the sale of your property does not cover your remaining debt, the remaining balance is written off. This means that your beneficiaries will not have to shoulder the loan amount. 

Equity release means that I cant provide an inheritance

Many plans allow you to ringfence a portion of the value in your property. This means that an agreed portion of the equity is protected for inheritance purposes. 

I will have to pay tax on the equity

Any money that you release from your property with equity release is tax-free. 

A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 023 4 567.


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