Equity release is a type of mortgage that allows homeowners aged 55 and over to release some of the equity they have built up in their homes. The money released can be used for any purpose, such as paying for home improvements, holidays, or healthcare costs

There are two main types of equity release mortgages in the UK:

• Lifetime mortgages

With a lifetime mortgage, you receive a lump sum of money or a regular income. You do not have to make any monthly repayments. Instead, interest is added to the loan and it is only repaid when you die or move into long-term care.

• Drawdown mortgages

With a drawdown mortgage, you can access money from your home as and when you need it. You can take out a lump sum or a series of smaller amounts. You will need to make monthly repayments, which will include interest on the amount you have borrowed. The amount of money you can release through equity release will depend on your age, the value of your home, and the type of plan you choose. You should also be aware that there are fees associated with equity release, so it is important to find a plan which is suitable and right for you.

Here are some of the benefits of equity release:

• It can provide homeowners with a lump sum of money that they can use to fund their retirement.
• It can help to reduce the risk of becoming financially dependent on family or friends.
• It can give homeowners peace of mind knowing that they have access to funds if they need them.

If you are considering equity release, it is important to weigh up the risks and benefits carefully before making a decision.

Here are some of the risks associated with equity release:

• The amount of interest that can be charged on a lifetime mortgage is unlimited. This means that the amount you owe could grow significantly over time.
• If you move into long-term care, you may have to sell your home to repay the loan. This could leave you without a home.
• Equity release can affect your entitlement to means-tested benefits.
• You may lose your home if you cannot keep up with the repayments.
• You may have to pay early repayment charges if you sell your home before the mortgage is repaid.
• You may not be able to get a lifetime mortgage if you have other debts, such as credit card debt or a loan.

If you are considering equity release, it is important to be aware of the risks and to make sure that you understand the terms and conditions of your plan. You should also speak to one of our independent financial advisers who can help you to make the right decision for your circumstances.

Whether an equity release mortgage is right for you depends on your individual circumstances and goals. Here are some factors to consider:

• Your age: Equity release is generally only available to homeowners aged 55 and over.
• The value of your home: The amount of equity you can release will depend on the value of your home.
• Your income and expenses: You need to make sure that you can afford the monthly repayments, if any, and the interest charges.
• Your health: If you have any health problems, you may want to consider a lifetime mortgage with a no-repayment guarantee. This means that you will not have to make any repayments, even if you move into long-term care.
• Your heirs: Equity release can reduce the amount of inheritance your heirs receive.
• Your tax situation: The tax implications of equity release can be complex. You should speak to a financial adviser to get specific advice for your circumstances.

If you are considering equity release, it is important to speak to one of our independent financial advisors. A financial adviser can help you to understand your options and help you make the right decision for your circumstances.

The costs of equity release can vary depending on the type of plan you choose and the provider you use. However, there are some common costs, which include:

• An arrangement fee: This is a fee that is charged by the provider when you take out a plan.
• A valuation fee: This is a fee that is charged by a surveyor to value your home.
• Legal fees: You will need to pay legal fees to draw up the paperwork for your plan.
• Ongoing fees: There may be ongoing fees, such as an annual management fee, charged by the provider.

The tax implications of equity release can be complex and it is important to speak to a financial adviser to get specific advice for your circumstances. However, there are some general points to note:

• Interest on a lifetime mortgage is not tax-deductible.
• Any money you receive from a drawdown mortgage may be subject to income tax.
• If you move into long-term care, you may have to pay inheritance tax on the amount you owe on your equity release plan.