The equity meaning in the context of homeownership is the portion of the property that is owned outright by the homeowner. It is calculated by subtracting the outstanding mortgage balance from the property’s current market value.
As the homeowner pays off the mortgage over time or if the property appreciates in value, the equity increases. Equity can be seen as a form of wealth or a financial asset that homeowners can tap into through various means, such as equity release.
Equity release is a financial product that allows homeowners, typically those aged over 55 years old, to access the equity tied up in their property. It enables individuals to release a lump sum or regular income, while still being able to live in their home.
The borrowed amount, plus interest, is typically repaid when the property is sold or upon the homeowner’s death. Equity release can provide a means to supplement retirement income, fund home improvements or support other financial needs.
At Deedle, we would be happy to assist you in getting an equity release. Simply complete our online enquiry form and a dedicated expert will be in touch on the same day.
Eligibility for equity release typically depends on several factors. While specific requirements may vary among providers, the general criteria for qualifying for equity release include:
It’s important to note that eligibility criteria may differ between equity release schemes, and it is advisable to seek independent financial advice to understand your specific circumstances and options.
Safety is of utmost importance when considering equity release. The industry is regulated by the Financial Conduct Authority (FCA) to ensure consumer protection.
At Deedle, we work with reputable lenders who abide by strict standards. When you fill out our application form we will carefully assess your circumstances to ensure you can make the best decision for your situation.
Deedle is a reputable mortgage broker with extensive experience in the mortgage industry, including equity release. We are well-versed in the complexities of equity release and can provide you with professional guidance throughout the process.
We have access to a diverse panel of lenders and equity release products, ensuring that we can find the most suitable option for your specific needs and circumstances. We’ll take the time to understand your requirements and present you with tailored solutions.
We offer free, impartial advice and we will always prioritide your best interests. Apply now via our quick and easy online form!
When it comes to equity release, there are two main types of options available in the UK:
Lifetime Mortgage: |
Home Reversion: |
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This is the most common type of equity release. It allows homeowners aged 55 or older to release a tax-free lump sum or receive regular payments using the equity tied up in their property. The loan is repaid, along with any accrued interest, when the homeowner passes away or moves into long-term care. There are various options within lifetime mortgages, such as drawdown plans, where you can release funds as needed or enhanced plans, which consider your health and lifestyle to potentially offer higher borrowing amounts. |
This involves selling a portion or all of your property to a home reversion provider in exchange for a lump sum or regular payments. You retain the right to live in the property rent-free until you pass away or move into long-term care. Once the property is sold, the provider receives their share of the proceeds based on the agreed percentage ownership. Home reversion is less common than lifetime mortgages and may be more suitable for those who prefer not to take on debt. |
Determining whether equity release is the best option for you depends on various factors and your unique financial circumstances. It’s recommended to consider the following aspects:
Financial Needs – Assess your financial requirements and goals. Equity release can provide a lump sum or regular income, which may be useful for specific purposes like funding home improvements, supplementing retirement income or clearing debts.
Long-Term Plans – Think about your long-term plans and how releasing equity may impact them. Consider your desire to leave an inheritance for your loved ones or if you plan to downsize or move in the future.
Affordability and Repayment – Understand the costs associated with equity release, including interest rates, fees, and potential early repayment charges. Consider if you can afford these costs both now and in the future.
Alternatives – Explore other options available to you, such as downsizing, accessing other savings or investments or seeking financial assistance from family members. There are also mortgages for over 60s you could consider for a new property.
Equity release can reduce the value of your estate and the amount you can leave as an inheritance. However, you can choose to protect a portion of your home’s value as an inheritance for your loved ones through features like inheritance protection guarantees.
Yes, many equity release plans offer the flexibility to move to a new property, known as ‘portability‘. However, certain criteria must be met, and it’s essential to consult with your equity release provider to ensure a smooth transition.
Early repayment of an equity release plan may be possible. However, it’s crucial to review the terms and conditions of your specific plan. Early repayment charges may apply, and seeking advice from your provider or an independent adviser is recommended.
Releasing equity can affect means-tested benefits, as it may increase your overall wealth or income. It’s important to consult with a specialist adviser or the benefits office to understand the potential impact on your specific benefits. There may be options to structure your equity release plan to minimise the impact on means-tested benefits.
Yes, some equity release plans offer the option to make interest payments, either on a monthly basis or as and when you choose. By making interest payments, you can control the overall amount of debt that accrues over time. It’s important to discuss this option with your equity release provider and understand the implications and affordability of interest payments.
