If you are a UK homeowner aged 55 or over, the Saga Equity Release Advice Service, provided by HUB Financial Solutions, may be able to help you access money tied up in your home.
How does Equity Release work?
Equity release is a way of unlocking a proportion of the value, or equity, you have in your home in exchange for a tax free lump sum; without having to move.
The Saga Equity Release Advice Service, provided by HUB Financial Solutions, can help you decide if equity release could be right for you.
As equity release may affect your state benefit entitlement, our advisers carry out a full financial review of your personal circumstances. They will also explain how equity release will reduce the value of your estate.
There are two main types of equity release - lifetime mortgages and home reversion plans.
A lifetime mortgage is secured against your home. A home reversion plan involves selling part or all of your home. Either type could provide you with a tax-free lump sum, a regular income or both.
Our experts will be able to help you understand which of these could best suit you.
When you have an appointment, your financial situation will be reviewed by an experienced and qualified adviser. They will assess whether equity release may be suitable for you or if there may be a more suitable option for you. It will also include an assessment of your eligibility for state benefits.
- Whether you choose to take out equity release through the Saga Equity Release Advice Service or not, you won't have to pay a fee for the advice.
The Saga Equity Release Advice Service provides you with access to a range of carefully selected plans and providers. Your adviser will recommend the product best suited to your individual needs and circumstances. If leaving an inheritance to loved ones is important to you, there are certain equity release plans that can factor in your wishes.
Ask your adviser to explain how this can be done.
- Equity release isn't right for everyone, so there's no obligation to continue with your enquiry any further than you're comfortable with. Plus, if your adviser believes it isn't suitable for you then they will tell you - clearly explaining why.
If you decide to take out a plan, HUB Financial Solutions will pay Saga an introductory fee.
What are the benefits of equity release?
- Continue living in your own home and use the funds released for almost anything you choose.
There's no risk of negative equity. This means that when the property is sold after you die or have moved into permanent long-term care, you or your beneficiaries will not have to repay more than the sale proceeds. Even if they are less than the amount owed.
The flexibility to release cash as and when you need it, giving you greater control of your finances.*
A free state benefits check is included as part of the advisory journey.
Things to consider
- While some plans may enable you to make provision for your family when you’re gone, they will not be able to inherit your property or its full sale value
- An increase in your income might disqualify you from certain means-tested benefits
- There will be some legal proceedings to sort out, similar to when you buy or sell a property, which may involve legal fees
- Your income could be adequately improved by checking you receive all the state benefits and grants you are entitled to
- Obtaining similar amounts of money could be possible by selling your property and moving to a cheaper home
- If equity release is not suitable for you, your adviser will tell you and suggest possible alternative solutions
- There may be an early repayment charge if you settle the lifetime mortgage early, details of which will be explained to you.
Why choose Saga for equity release
1. Exclusive access to the Saga Equity Release Plan
This plan is only available through the Saga Equity Release Advice Service, so you won’t be able to access it through any other company. There are no advice or arrangement fees to pay as part of this exclusive plan, although other fees may still apply.
Your adviser will let you know if the Saga Equity Release Plan is the most suitable for your individual circumstances. The Saga Equity Release Plan is provided by Just.
Like all lifetime mortgages, the Saga Equity Release Plan is secured against your home.
2. The assurance of an established well-known company
Saga has been carefully choosing financial products for more than 25 years, supported by a high standard of service. We thoroughly researched equity release before introducing it to our customers so this should give you real peace of mind. You can also be reassured by our long history of customer care.
3. Member of the Equity Release Council
As members of the Equity Release Council, we're committed to protecting our plan holders by following their Statement of Principles and your adviser will only recommend lifetime mortgages offering no risk of negative equity.
How could equity release help you?
Perhaps you’d like to make improvements to your home, or help your loved ones onto the property ladder.
Once you’ve released the equity from your home you can use it almost however you wish.
Mr and Mrs Johnson modernise their home
Fictional Case Study
Mr and Mrs Johnson, aged 72 and 70, have lived in their current property for 26 years. They bought it for £97,000 and it is now worth around £271,543, a staggering increase of 179%. Having been there for so long, they couldn’t imagine living anywhere else. However, its upkeep has become quite expensive and it needs some modernising, especially as Mr Johnson has mobility difficulties and would benefit from a stair lift.
Their younger son read an article on equity release and suggested it as a way for them to remain in their home without reducing their standard of living. They sought specialist advice and once their circumstances were reviewed, which included looking into any available grants that might aid Mr Johnson’s mobility around the house, they were recommended a lifetime mortgage with a drawdown facility. This would provide them with £25,000 now to replace the kitchen and install a stair lift, plus another £15,000 for a longed-for trip to Australia to visit relatives. They also have the option to withdraw a further £49,609 from their property in the future.
The interest will be added annually to the value of the loan, so they do not have any repayments to make. Also, interest is only charged on the amount of equity they actually release (plus the accumulated interest) – the funds that remain in their cash facility will only incur interest if they are withdrawn.
In this fictional example, equity release has given Mr and Mrs Johnson the opportunity to adapt their house to their needs and give them some financial security at a time when they were beginning to worry about things getting a little tight. It has also enabled them to have the holiday of a lifetime.
Am I eligible for equity release?
To be eligible for equity release you must:Own and occupy a UK property of standard construction*
Be aged 55** or over (youngest applicant, if borrowing jointly)
Your property must be worth at least £70,000**.
*The definition of standard construction may vary between product providers.
**Minimum age and property value varies between product providers.
There is no fee charged for advice with the Saga Equity Release Advice Service whether you go ahead with a plan or not. So you can find out how much equity you could release and whether a plan would be suitable for you without worrying about the cost.
Costs will vary depending on the provider. A rough estimate to set up a plan is around £2,000-3,000 for set-up, valuation and legal fees*. You may also have to pay for advice provided by your equity release adviser. Although remember, if you purchase an equity release product through the Saga Equity Release Advice Service, you won't have to pay for the advice you receive.
The Saga Equity Release Plan, only available through the Saga Equity Release Advice Service, has no application, valuation or administration fees. Plus you will receive £425 towards legal fees - paid to your solicitor on completion. If the legal fees come to more than this, you will need to pay the difference. Your adviser will tell you if you are eligible for this plan and whether it is best suited to your needs. If not, and another plan is recommended, then this may be subject to application, valuation or administration fees.
*Equity Release Council website, FAQs, April 2017
In most cases, to be eligible for equity release you will need to be at least 55 and own your UK home. In the case of a joint application, both applicants should be aged 55 or over.
The value of your property also affects eligibility, and the minimum amount varies by lender. The ownership status (leasehold or freehold), property type and even construction are all factors that influence the availability of certain products and lenders. Your specialist adviser will explain things fully and recommend products that are best suited to your circumstances.
If you take out equity release, other people can live with you in the property while you are living there – providing this is disclosed to the provider. These other occupiers will not have the right to continue to live in the property when the borrower(s) die or move permanently into long term care. It is important the occupiers understand this, and they may be asked to sign a form acknowledging the lifetime mortgage and they may be required to seek legal advice.
All equity release plans will reduce the value of your estate and could affect your entitlement to state benefits. The Saga Equity Release Advice Service offers a full review of your entitlement to state benefits to ensure that, for any money raised, any corresponding reduction in state benefits will be clearly identified, discussed and taken into account. You will be made aware of any state benefit entitlement that you may be eligible for and are not currently claiming, and advised how to claim.
This depends on a number of factors, the main ones being your age and the value of your property. The older you are the greater proportion of your home’s value can be released. The amount you can borrow and the way in which you can borrow it, will depend on the plan you choose.
For a guide to the maximum amount you could potentially release from your home, try our free calculator. This gives an indication of the maximum amount you may be able to release with a lifetime mortgage and is based upon your estimated property value and the age of the youngest homeowner. It doesn't take into account your personal circumstances. To speak with a specialist, and arrange an appointment with an adviser, please call 0800 096 1484
Yes you can. The money you release from your home must first be used to clear the existing mortgage or debt secured on the property. After that, the money can be spent as you want.
The Saga Equity Release Advice Service will only ever recommend plans that enable you to carry on living in your home until the last plan holder dies or moves permanently into long-term care – as long as you comply with the product terms and conditions, which your adviser will explain to you.
If you have taken out a lifetime mortgage, the plan is secured against your home, but the property remains in your name as it would with a conventional mortgage. If you have taken out a home reversion plan, the home reversion company will own all or part of your property (although you can continue to live there for the rest of your life).
We would estimate that it takes about 3-4 months from the time you initially contact us and book an appointment with an adviser to the time you receive your money. This includes the time required for your adviser to do a full assessment of your situation, make their recommendations and for you to make your decision.