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Is it time to release the money from your home?

19 April 2022

Equity release is an established way of raising extra funds in retirement and Saga’s Lifetime Mortgage offers unique benefits. Could it be right for you?

Illustration for the Saga Magazine by Andrew Baker.

Unlocking the capital in your property is a big decision, but Saga Equity Release, provided by HUB Financial Solutions Limited, can help you make it with confidence.

Lifetime mortgages are a type of equity release, allowing homeowners aged 55 and over to borrow tax-free cash against their property.

You can spend it on almost anything you like – perhaps that kitchen you always wanted or finally getting the bathroom of your dreams, or even paying bills as living costs soar.

Saga Equity Release could help you achieve this, reassured by the knowledge that you are in safe hands. It exclusively offers the Saga Lifetime Mortgage, provided by Just.

Saga Lifetime Mortgage customers enjoy two unique benefits. Under the innovative Saga Money Back Guarantee, anyone who changes their mind can cancel their lifetime mortgage without incurring any early repayment fees or interest charges, for up to six months after receiving their initial advance. All you have to do is pay back the money you borrowed in full. This is a benefit you won’t find elsewhere. Your initial advance must not exceed £150,000. Terms and conditions apply. (See below).

The Saga Service Promise also pledges to hand over the funds from a lifetime mortgage within 40 days – ideal for those who need money quickly. If it takes just one day longer, customers get a £100 payment. This Promise will not apply if you’re using the Saga Lifetime Mortgage to purchase a new property, rather than remortgaging an existing one. Terms and conditions apply. See saga.co.uk/money/equity-release/terms-and-conditions. In addition, every Saga Equity Release customer can request personal medical underwriting, so the sum borrowed and interest rate is based on their own health and lifestyle. Around six in ten pay less interest as a result – or can borrow more.

The Saga Lifetime Mortgage offers a flexible drawdown option, where you take an initial lump sum, and are free to draw more money later. You only pay interest on the money you have taken.

There are no affordability checks with a lifetime mortgage, as it is a loan secured against your home.

You don’t have to make any monthly repayments during your lifetime. The mortgage, including rolled-up interest, is usually cleared using the proceeds from the sale of your home when you and your partner (if borrowing jointly) die or move into long-term care.

You remain the registered homeowner throughout, with the guaranteed right to stay there for as long as you live. You are even free to move property, if you wish, provided your new home meets the lender’s criteria.

If you have an existing, unpaid mortgage on your home, you can still take out a lifetime one, but the old mortgage must be repaid at the same time as taking out equity release. You can use the money you release to do this but repaying a mortgage with equity release may cost more in the long term.

Equity release is fully regulated by the Financial Conduct Authority. Saga, HUB Financial Solutions Limited and Just are all long-standing members of the Equity Release Council, which sets out a strict code of conduct, including a pledge that customers will never owe more than their home is worth once sold, even if house prices crash.

You are charged a fixed rate of interest with the Saga Lifetime Mortgage. While slightly more expensive than a standard mortgage, rates are low compared to what they have been historically, although what you pay partly depends on the product features you choose.

With lower rates, the interest rolls up at a slower pace, so you can pass on more property value to loved ones.

Saga Equity Release gives all customers access to free specialist advice, with no obligation or pressure. Your adviser will explore alternative ways of raising the money you need, such as downsizing to a smaller property, to make sure every angle is considered before pressing ahead.

They will also encourage you to discuss your decision with loved ones, as well as explain how equity release will reduce the value of your estate and may affect any means-tested state benefits you currently receive.

And, if you go ahead, you can do so with confidence thanks to Saga’s Money Back Guarantee and the Saga Service Promise.

A lifetime mortgage could help ease any money worries – with added Saga security.

Use our free Equity Release calculator.


Before going ahead

Here’s five tips from Saga’s Head of Financial Services, Alex Edmans

  1. Seek specialist advice.
  2. Equity release isn’t right for everyone, so it is essential to get specialist advice to see whether it meets your needs.

  3. Consider the alternatives.
  4. Options include downsizing, personal loans or getting help from family. Before committing to equity release, consider if any of these would work for you.

  5. Make sure the product is provided by an Equity Release Council member.
  6. If so, you will be protected by customer safeguards including a pledge that you will never owe more than the value of your property.

  7. Consider releasing only what you need with a drawdown plan.
  8. A drawdown plan lets you withdraw a smaller initial sum, with the flexibility to take more equity later, if need be. The advantage is that you only pay interest on the money you use.

  9. Talk to trusted family and friends.
  10. Equity release can be a big decision, so it can be helpful to talk it through with someone you trust. You could also bring them along to adviser meetings.

Find out more

Visit saga.co.uk/saga-equity for more information and to calculate how much you could release. Alternatively, call Saga Equity Release, provided by HUB Financial Solutions Ltd, on 0800 051 5635.

Disclaimer

The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.