Home Equity release Is equity release safe?

Is equity release safe?


Are you looking to make some home improvements, help your family out with funds, or live more comfortably in retirement? If you are aged 55 or over and a homeowner, releasing some of the equity from your home could be the boost to your finances that you have been searching for.

However, you may be asking yourself ‘is equity release a safe option?’ Here at The Equity Release Experts, this is a question we can help answer.
 

Added Protection

We’re members of the Equity Release Council (ERC) and adhere to its high standards of conduct. All plans we recommend meet the Equity Release Council standards and include the no-negative equity guarantee, so you will never end up owing more than the value of your property. Plans meeting the ERC’s standards also ensure that you have the right to remain in your property for life – or until you move into long-term care – as well as the right to move home (subject to provider criteria).

If you are unsure whether equity release is a safe option for you, get guidance from our expert equity release advisers you can trust and call us on 0800 188 4812 or request a callback.
 

What are some of the potential downsides of equity release?

As with any financial product, there are certain risks and disadvantages to be aware of when it comes to equity release.

With a lifetime mortgage one of the main things to note is the effect of compound interest and how this can increase your debt over time. As you won’t be making any monthly repayments, the debt will grow with the interest added onto interest.

Other potential drawbacks of equity release include that it will reduce the value of your estate, and may affect your entitlement to means-tested benefits now – or in the future.

With a lifetime mortgage, it is designed to last the rest of your life and to not be repaid, if at any point you wish to pay it off earlier than planned, you may incur early repayment charges.

With a home reversion plan, the other form of equity release, you will no longer be the legal owner of the property and you will receive less than the market value when it is sold to the home reversion company. 

At The Equity Release Experts, our advisers are always on hand to review your circumstances and help you explore your options. After researching the whole of market, your equity release adviser will give you a personalised recommendation. They'll also let you know if equity release isn't the correct option for you. 
 

How can we help?

 

We specialise in offering reliable equity release advice. If you want to find out whether it could be the right choice for you, we can help you. Our expert team can be contacted on 0800 188 4812 (lines are open Monday-Friday, 9am-5.30pm), by email at [email protected] or you can request a callback.

Your other options

Before deciding on equity release, it's important you're aware of some of your other later life finance options, which may include:

Retirement interest-only mortgage
Retirement repayment mortgage
Or see if equity release is right for you

Equity release costs

Knowing the costs associated with equity release and how to help manage them is important.

Compound interest explained
Lump sum vs drawdown lifetime mortgage

Things to consider with equity release

  • Equity release may involve a lifetime mortgage, which is a loan secured against your home.
  • Equity release will reduce your estate’s value and may affect your entitlement to means-tested benefits
  • A lifetime mortgage may result in limited or no property equity remaining and will reduce your financial options in the future
  • The loan, plus compound interest, is typically repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care
  • Unless you decide to go ahead with a plan, our service is completely free of charge, as our fixed equity release advice fee of £1,799 is only payable on completion of a plan
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