Equity Release

You need to be at least 55 years of age to access traditional equity release products like lifetime mortgages. However, there are some options to unlock your home equity if you are under 55, such as remortgaging, selling your home or taking out a second charge loan secured against your home.

Yes, you can remortgage your property to release equity. This involves taking out a new, larger mortgage on your home and then receiving the difference as a lump sum. This is a strategy commonly used for home improvements, consolidating debt or funding major purchases. It will increase the cost of your monthly repayments, so it is recommended to seek advice to check affordability.

You do not need to pay tax on equity release, as it is a loan, not a source of income. So, even if you are intending to use the funds released to supplement your income, you will not be subject to taxation.

Equity release can reduce your Inheritance Tax (IHT) liability. Through releasing equity from your home, you can access cash which reduces the value of your estate. The equity release loan needs to be repaid from your estate, which reduces the funds your beneficiaries receive. We recommend seeking professional advice to assess any tax implications.

Equity release interest is charged on your original loan amount plus any previously accrued interest. Typically, your lender will calculate interest daily and consolidate this into a monthly sum you owe them. The exact interest rate will vary between lenders, as will the amount you’ll need to repay each month. Interest accrues over time and is repaid - along with your loan - when the property is sold. Usually this is after the homeowner dies or moves into long-term care.