The Saga Equity Release Advice Service is provided by HUB Financial Solutions Limited.
Discover ways of topping up your pension income
On Thursday 25 October, Saga Personal Finance held a live online Q&A event with a panel of money experts.
During the event our experts shared their views and insights on how customers could use their home to supplement their retirement income, as well as answering a selection of questions that our customers submitted.
Don't worry if you missed our live Q&A event as we're giving all customers the opportunity to watch the event again by simply clicking on the button below.Watch now
What is equity release?
‘Equity’ is the market value of your home, less any outstanding mortgage or other debt secured against it. If you've lived in your home for a long time, you'll have probably seen local house prices rise steadily, so the amount of equity you now have could be quite substantial.
‘Equity release’ means getting some of this money out of your home and into your pocket, without having to sell up and move out. You can continue to live in your own home for the rest of your life, or until you move out permanently into long-term care.
Is equity release right for me?
Releasing money from your property may be an option you're considering, however it is a big decision as it will affect the value of your estate.
Your adviser wants to help you make the right decision and see whether equity release is the right choice for you.
They will answer any questions you have and will also cover the following:
Alternative ways to access the money you need
If you have an outstanding mortgage, this will need to be repaid with the proceeds of the equity released
A review to ensure that you are claiming all the state benefits you are entitled to
How we can help
The Saga Equity Release Advice Service, provided by HUB Financial Solutions Limited, gives you access to a range of carefully selected products and providers. Your adviser will discuss the types of equity release products available that are best suited to your needs and help you decide if equity release could be right for you.
To be eligible for equity release you must be 55 or over with a UK property worth at least £70,000. Minimum age, property value and property criteria vary between providers.
Types of equity release
There are two main types of equity release products: lifetime mortgages and home reversion plans. Below are types of lifetime mortgage, if you would like to read more about a home reversion plan, click here. It is important to note using equity release will reduce the value of your estate.
1. Regular drawdown lifetime mortgage
A regular drawdown lifetime mortgage is a new type of equity release product unique to Saga. It combines a tax-free lump sum payment with ongoing tax-free monthly payouts, making it a possible option if you’re looking to supplement your income in retirement.
This lifetime mortgage is available to people aged 60-80 with a UK property worth at least £150,000. It is repaid in the same way as a standard lifetime mortgage which is usually repaid from the proceeds of the sale of your property, when you die or move permanently into long-term care. Because interest is only charged on money as it is released, it accrues at a slower rate than on a standard lifetime mortgage so there is likely to be less to repay in the future.
This type of lifetime mortgage is only available through the Saga Equity Release Advice Service – you won't find a similar product anywhere else. It is important to note that the loan is secured against your home.
To find out if it could be right for you, click here
Or alternatively, call:
0800 096 0649
2. Lifetime mortgage
A lifetime mortgage enables you to release a tax-free cash lump sum from the value of your home.
You will continue to own your home completely and retain the right to live in it for the rest of your life.
You can choose to repay the interest each month or make no monthly payments and roll up the interest into the loan amount. The amount borrowed plus accrued interest is usually repaid from the proceeds of the sale of your property when you die or move permanently into long-term care.It is important to note that the loan is secured against your home.
To read more about this type of equity release, click here
3. Enhanced lifetime mortgage
An enhanced lifetime mortgage could allow more cash to be released from your property than a standard lifetime mortgage. This is dependent on lifestyle and medical factors that are taken into consideration.
To read more about this type of equity release, click here
4. Drawdown Lifetime Mortgage
A drawdown lifetime mortgage enables you to release some of the money you have tied up in your home by providing you with an initial advance, together with an approved 'cash facility' that you can draw on, as and when you need it.
The interest is only added on the amount released so it adds up more slowly than it would if you released the full lump sum, however every time you borrow from your cash facility a new interest rate could be applied to the amount you are asking to borrow. You can continue to live in your own home for the rest of your life, or until you move out permanently into long-term care. It is important to note that, like standard lifetime mortgages, the loan is secured against your home.
If you would like to read more about this type of equity release, click here
Or alternatively, call:
0800 096 7120
How much equity could you release?
Our free online calculator will provide an indication of the maximum amount you may be able to release. It's quick and easy to use and provides a quote based on a lifetime mortgage.
Frequently asked questions
If you take out a lifetime mortgage, the property remains in your name, as it would with a conventional mortgage. However, if you take out a home reversion plan, the reversion company will own all or part of your property on the understanding that you can continue to live there rent-free for the rest of your life.
Yes, and your adviser will discuss these with you. Some possibilities might be to move to a smaller property, rent out a room in your current home, or ask for help from your family. The adviser will also make sure you’re receiving all the state benefits you’re entitled to.
The amount you can release depends on your age and the value of your property.
It depends on the value of your home and the amount remaining on the existing mortgage. Any outstanding mortgages secured against your home will have to be paid off at the same time as taking out equity release plan.
The costs involved include set-up, valuation and legal fees, and these vary depending on the provider and the type of plan you choose. With a lifetime mortgage you can add some of the fees to your loan to avoid too many upfront costs.
Remember that with the Saga Equity Release Advice Service there is no fee for the advice. If the Saga Equity Release Plan or the Saga Regular Drawdown Lifetime Mortgage is recommended by your adviser, there are no valuation or set-up fees and you will also 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.
With a lifetime mortgage, the amount that will need to be repaid depends on the amount of equity you release, how long you’ve had the loan, the rate of interest charged and any fees added. If you repay the loan early, an early repayment charge may apply.
A home reversion plan isn’t a loan and so it won’t accumulate interest. Instead, the provider will receive the agreed proportion of the property value when it is sold following your death or permanent move into long-term care.
Generally, yes. Many products can be transferred to a new home as long as the property is acceptable to your provider as continuing security for the equity release plan. With a lifetime mortgage, if your new property is worth less than your old home, you may have to repay some of the outstanding loan.
Equity release could enable you to help your family while you are still living, but it will reduce the value of your estate and therefore the amount that will go to your beneficiaries on your death. Your adviser will assess how this is likely to affect the value of your estate.
With a lifetime mortgage, if your home sells for more than you owe, the excess would form part of your estate. You could protect some of the value of your estate by choosing a lifetime mortgage with interest repayments, thereby reducing the amount of interest that accumulates over the full term of the loan.
With a home reversion plan, you know exactly what proportion of your home’s value will be left to your loved ones, but not the amount this will be worth.
Equity release will not affect any other money you leave as part of your inheritance – for example, from savings or life assurance policies.
Your adviser will only recommend products that meet the standards of the Equity Release Council. These come with a guarantee 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 this is less than the amount owed.
Once you’ve chosen a plan and the application has been accepted by the lender, it will typically take six to eight weeks until you receive the money. This is normally three to four months from your initial contact with the Saga Equity Release Advice Service, taking into account the time it takes for your adviser to assess your situation fully, make their recommendations and for you to then make a decision.