What is equity release?

If you have owned your home for many years, despite the recent economic conditions the chances are that it will be worth considerably more now than when you bought it. You may have spent your lifetime building up this valuable asset and now might be the time to realise some benefit from it. 

Equity release allows you to turn some of the value of your home into tax-free cash. It can provide you with:

  • The freedom to spend the money as you choose
  • A cash facility that enables you to release funds as required
  • The ability to remain living in your own home.
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Equity Release

Taking out equity release is an important decision, so it's vital that you have as much information as possible. The Saga Equity Release Advice Service can help you find out more and allow you to establish whether equity release could be right for you. Please use the links below.

Equity release may involve a lifetime mortgage or a home reversion plan. To understand the features and risks, ask for a personalised illustration. Equity release is not right for everyone. It may affect your entitlement to state benefits and will reduce the value of your estate.

What is equity release?

Equity release is a way of unlocking a proportion of the value, or equity, you have in your home in exchange for tax-free cash; without having to move.

Freedom to spend the money as you choose 

You are then free to use the money on almost anything you choose.  There are many reasons for releasing equity from your home and here are just a few of them:  

  • To supplement your pension income to cover living expenses
  • To carry out some home improvements
  • To take that holiday of a lifetime
  • To help your children onto the property ladder
  • To settle a repayment mortgage or clear the balance on an interest-only mortgage
  • To improve your standard of living
  • To see your family enjoy their inheritance while you're still here
  • To pay off other outstanding debt and lower your monthly outgoings.  

 

Think carefully about securing other debts against your home.  

Please note that if you have an outstanding mortgage or any loans secured against your home, you will need to pay these off completely with any equity you release.  The remaining cash is then yours to spend on almost anything you choose.    

You no doubt feel that you have worked hard for your home so maybe now's the time get your home to work hard for you.

Flexibility to release cash as and when you need it 

You can choose to take your cash as a one off tax-free lump sum, or as smaller amounts over a number of years.  This flexibility gives you more control of your finances in the longer term.  Whether you have an outstanding mortgage you want to pay off or you want to have money available to draw on throughout your retirement, there are equity release schemes available to enable this.   

Stay living in your home 

When it comes to generating additional cash, many people feel they have no option but to sell their home and downsize to get the money they need.  However, with equity release you can generate extra cash without having to leave your much-loved home.  You will also not have to incur the cost and go through the upheaval of moving. 

Taking out equity release is a long term commitment.  You can choose not to make any monthly repayments, your loan will be repaid when you die or move permanently into long term care.  Until this happens you are free to stay in your home for as long as you choose. This may then reduce your monthly outgoings, providing you with more disposable income to enjoy your retirement. The interest will be rolled up and added to the loan amount.

Alternatively you can choose to take out a plan where you make interest repayments.  This allows you to keep the value of your loan as low as possible.

Types of equity release

There are two main types of equity release scheme - lifetime mortgages and home reversion plans

The Saga Equity Release Advice Service will be able to help you understand which option could be best for you, depending on your individual circumstances.

For more information call the telephone number at the top of the page or to see how much equity you could release use our free calculator.

  

 

The Saga Equity Release Advice Service is provided by Just Retirement Solutions Limited. The Saga Equity Release Plan is provided by Just Retirement Limited. Saga Personal Finance is a registered trading name of Acromas Financial Services Limited, which is registered in England and Wales (Company No. 3023493). Registered office: Enbrook Park, Sandgate, Folkestone, Kent CT20 3SE. Acromas Financial Services Limited and Just Retirement Solutions Limited are authorised and regulated by the Financial Conduct Authority. Just Retirement Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.