Types of equity release
1. Lifetime mortgages
With a lifetime mortgage you can release a tax-free cash lump sum from the value of your home. You will still own your home and can continue to live there for as long as you like.
Much like a traditional mortgage, a lifetime mortgage is a loan secured against your home, which accrues interest each month. The difference is that you don’t have to make any monthly repayments (although you can if you wish). Instead, the interest is ‘rolled up’ and added to the loan amount and any interest already added and it is all usually repaid from the proceeds of the sale of your property when you die or move permanently into long-term care.
The Saga Equity Release Advice Service offers two exclusive lifetime mortgage products, provided by Just. With the Saga Equity Release Plan, you can choose to take a one-off lump sum or a number of smaller amounts; while the Saga Regular Drawdown Lifetime Mortgage combines an initial lump sum payment with ongoing monthly payouts that could help supplement your income in retirement.
It may be possible to get an enhanced lifetime mortgage, which allows you to release more cash from your property than you can with a standard lifetime mortgage. To find out whether you’re eligible for this, your equity release adviser will take a number of health and lifestyle factors into consideration, including weight, blood pressure, medical conditions and whether or not you smoke.
It is important to note lifetime mortgages are a type of loan secured against your home and will reduce the value of your estate. Your entitlement to state benefits may be affected.
2. Home reversion plan
With a home reversion plan you sell part or all of your home to the provider and receive the proceeds of the sale in cash, as either a single lump sum or regular instalments.
Any home reversion plan recommended by the Saga Equity Release Advice Service will include the right to stay in your home rent-free for the rest of your life.
It’s important to note that you won’t receive the full market value of the part of your home you sell. This is because the home reversion company will not be able to re-sell the property until you die or move permanently into long-term care and they need to protect themselves against any potential loss in value if the housing market falls.
It is important to note that, like a lifetime mortgage, home reversion plan will reduce the value of your estate and your entitlement to state benefits may be affected.
Speak to the team:
To find out more about lifetime mortgages and home reversion plans, you can call:
There’s no fee for the initial 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.
Please refer to our Important information to find out more about the service and fees.