The basics
Am I old enough to apply?
You need to be at least 55 to take out a lifetime mortgage. The amount you can release generally increases with age, because the plan is expected to run for a shorter period.
Will the property still belong to me?
Yes, you keep ownership of your home and carry on living there.
Will I need to make payments each month?
With a lifetime mortgage, no. Most let the interest build up, with the loan repaid when you die or move into long-term care, and some let you make optional payments, which can reduce the total cost. With a retirement interest-only (RIO) mortgage, yes: you pay the interest each month.
Is there any chance I'd owe more than the house is worth?
Not with an Equity Release Council member. Their standards include a no negative equity guarantee, so the amount you or your estate repay can never exceed the value of your home.
Does the advice itself cost anything?
The initial conversation is free. If you decide to go ahead, I'll confirm all fees and costs in writing before you commit to anything.
Costs and repayments
What interest rate applies?
Rates vary between lenders and between plans, and they move over time. Equity Release Council standards require the rate to be fixed or capped for life, so you'll know the most it can be. Your personalised illustration shows the rate and the total cost.
How quickly does the amount owed build up?
When interest is added to the loan, the debt can grow quickly, since interest is then charged on interest already added. If the plan lets you pay some or all of the interest, that slows the growth. The calculator shows an illustration.
Does interest make up the whole cost?
No. Arrangement, valuation and legal fees may also apply, and some plans charge if you repay early. Any fees I charge will be confirmed in writing before you go ahead, and your personalised illustration should list every cost.
Am I able to repay the loan before the end?
Generally you can, though plans differ: some apply an early repayment charge and others allow repayment without one. Ask about early repayment charges and any repayment allowance before you decide.
Can the money be paid out in instalments?
Yes. With drawdown you receive an initial sum and hold the rest in reserve, paying interest only on the part you've taken. The lifetime mortgages page has more.
Is there any restriction on how I spend it?
Usually not. Typical uses include home improvements, clearing a mortgage or debts, helping family and boosting retirement income. We can discuss whether it fits what you have in mind.
Will releasing equity change my benefits?
It might. Money you release can count towards means-tested benefits, such as Pension Credit. Check before you decide, and I can talk you through how it could affect you.
Your home and your family
Could I still move house later?
Equity Release Council standards include the right to move to another suitable property, subject to the lender's criteria. In practice the plan may be able to transfer to your new home, or you can repay it. Read the terms of any plan before you commit.
What happens when I die or need long-term care?
The loan and interest are repaid, usually by selling the home. Anything left goes to your estate. With a no negative equity guarantee, your estate will never owe more than the home is sold for.
Will my family receive less when I'm gone?
Yes. Inheritance protection can set aside a share for them, but it reduces how much you can borrow. However, you can make payments towards Capital & Interest or Interest Only. It helps to talk to your family early, and they're welcome to join our conversations.
I still have a mortgage. Can I go ahead?
Often you can. Your existing mortgage is cleared from the money released and what remains comes to you. You can add it to the calculator.
Advice and next steps
Do we have to meet in person?
No. I work with clients remotely, so you can speak to me from your own home. A few steps do involve other people, such as the lender's valuation of your property and seeing a solicitor, and I'll explain how each of them works.
Is equity release all you advise on?
I advise on lifetime mortgages and retirement interest-only (RIO) mortgages only. If neither is right for you, I'll say so and talk through the alternatives.
Will I need legal advice?
Yes. Equity Release Council standards require you to take independent legal advice from a solicitor before you go ahead. We will arrange this on your behalf. It's a safeguard for you.
How long will it all take?
Typically a matter of weeks between applying and receiving the money, depending on the lender and the solicitors involved. There's no need to rush, and you can take as long as you need to make up your mind.
Who regulates equity release?
Lifetime and retirement interest-only mortgages are regulated by the Financial Conduct Authority, and Equity Release Council members follow additional standards. Avalon FS Ltd, the firm I advise through, is authorised and regulated by the FCA and is a member of the Council. The details are in the footer of every page.
Something else on your mind?
Just ask. Your first conversation is free, with no obligation.