Frequently asked questions about equity release
For more information call the Saga Equity Release team today to help you find out whether equity release could help you. Saga Equity Release is provided by HUB Financial Solutions Limited.
Frequently asked questions
We are always looking at ways to make our products and services, and the information about them, more accessible, so we welcome your questions. Here are the ones Saga Equity Release 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-8pm and Friday 9am-5:30pm (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 Saga Equity Release 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.
To inform Saga of a bereavement please call our team on 0800 092 3816. If your loved one has taken out equity release please also contact the provider using the details on the documents you have.
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. This can be done using the money you release. Just be aware that using equity release to repay existing debts or mortgages may cost more in the long-term.
There are a number of possible 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.
The advice you receive through Saga Equity Release is free. So you'll be able to discover the facts about releasing equity from your home free of charge without having to pay an advice fee, whether or not - you decide to go ahead.
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.
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.
Releasing equity is much like buying a house, so it's not an instant process. Your adviser needs to talk to you and assess your finances so you can make an informed decision. But we know that once you’ve decided, you want things to proceed quickly.
The product available through Saga Equity Release, the Saga Lifetime Mortgage, comes with a Saga Service Promise. This means that we’ll aim to have your money released to your solicitors account within 40 working days of your application being received and accepted by Just - the provider of the product. T&Cs apply.
For a step-by-step guide to the equity release process, see the ‘Is equity release right for me?’ section.
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 loan is repaid, 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 some lifetime mortgages, you could reduce the amount you owe by making interest payments.
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.
If you need extra help or support not mentioned here please visit our support page which will show you all the ways we can help.