Frequently asked questions
For more information call the Saga Equity Release Advice Service on 0800 096 7120. Lines are open 9am to 5pm, Monday to Friday (excluding bank holidays). The Saga Equity Release Advice Service is provided by HUB Financial Solutions Limited.
Frequently asked questions
We are always looking at ways to make our products, and the information about them, more accessible, so we welcome your questions. Here are the ones the Saga Equity Release Advice Service gets asked most often.If you’ve got a query that’s not answered here, please call a member of our team on:
Lines open Monday to Friday 9am-5pm. (excluding bank holidays)
If you take out a lifetime mortgage, the property remains in your name as it would with a conventional mortgage. If you take out a home reversion plan, the reversion company will own the proportion of the property you sell to them and, even if this is 100%, you can still live in your home rent free for the rest of your life.
There are usually alternatives to equity release and an adviser from the Saga Equity Release Advice Service will discuss these with you. These might be to move to a smaller property, rent out a room in your current home, or ask your family for help. The adviser will also make sure you’re receiving all the state benefits you’re entitled to.
The amount of equity you can release depends on your age and the value of your property.
You can use our calculator to get a quick indication.
This depends on the value of your home and the amount remaining on your existing mortgage. Any outstanding mortgage secured against your home will have to be paid off at the same time as taking out equity release.
There are a number of costs involved in taking out equity release:
• Set-up fees
• Valuation and legal fees
• Advice fee on completion.
With a lifetime mortgage, you can add some of these fees to your loan to avoid too many upfront costs.
There’s nothing to pay at the time of your consultation with the Saga Equity Release Advice Service, but if you choose to proceed with a recommended product, an advice fee of £750 will be payable on completion. This fee is already competitive, but Saga customers who are members of Possibilities will not have to pay it at all.
If the Saga Equity Release Plan or the Saga Regular Drawdown Lifetime Mortgage, provided by Just, is recommended by your adviser, there are no set-up or valuation fees to pay. You’ll also receive £425 towards your legal fees, paid to your solicitor on completion.
With a lifetime mortgage, the amount that will need repaying when you die or move permanently into long-term care depends on the amount of equity you release, how long you’ve had the loan, the rate of interest charged and any fees added.
Interest on a lifetime mortgage is rolled up or compounded, which means the interest for the second year is calculated on the sum of the original loan plus the interest that was charged during the first year. This same process applies year after year, so that each year the interest is calculated on a higher amount than the previous year. It’s also worth bearing in mind that the value of your property will most likely be growing at the same time.
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’s sold following your death or permanent move into long-term care. No-one will know the monetary value of that proportion until the property is sold.
Many products can be transferred to a new home as long as the property is acceptable to your equity release provider as continuing security. 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.
For a step-by-step guide to the equity release process, see the ‘Is equity release right for me?’ section. It can take in the region of four months from when you first got in touch with the Saga Equity Release Advice Service until the money is transferred into your account.
A lifetime mortgage becomes repayable when the last person named on the equity release agreement dies or moves permanently into long-term care. The amount owed is usually paid to the equity release provider from the sale proceeds of the property, although it can come from other financial means.
Until the property is sold and the loan is repaid by the executor of your estate or next of kin, interest will continue to accrue. Most lenders allow up to 12 months for the money to be repaid – this can vary between providers and will be detailed in the documentation if you take out a product.
With a home reversion plan, the property will also need to be sold so that the equity release provider can take their share of the sale proceeds. If the provider owns the whole property, they will be responsible for selling it and recouping their costs.
You could use equity release to help out 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.
With a lifetime mortgage, if your home sells for more than you owe, the excess would form part of your estate. You could reduce the amount you owe by making interest payments on your lifetime mortgage.
With a home reversion plan, you’ll 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, such as savings or life assurance policies.