Frequently asked questions
Here are the answers to some of the questions the Saga Equity Release Advice Service are most often asked.
If you have other questions and would like to speak to a member of the team call:
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 mortgage secured against your home will have to be paid off at the same time as taking out equity release.
The costs involved include set-up, valuation and legal fees, and these vary depending on the provider and the type of product you choose. With a lifetime mortgage, you can add some of the fees to your loan to avoid too many upfront costs.
The Service offers a free no-obligation consultation, however, if you choose to proceed with a recommended product, an advice fee of £750 is payable on completion. It’s worth remembering that if you are a Saga Possibilities member you’ll benefit from not having to pay an advice fee upon completion.
If the Saga Equity Release Plan or the Saga Regular Drawdown Lifetime Mortgage, provided by Just, 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 product. 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. The new property will have to meet lenders criteria.
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 reduce the impact of the lifetime mortgage on your estate with making interest payments as this would reduce the amount of interest that accumulates over the lifetime 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.