Equity release: Frequently Asked Questions

Are Lifetime Mortgages safe?

Lifetime mortgages and other equity release products are regulated by the Financial Conduct Authority (FCA). Our advisers are fully qualified and will give you clear evidence and advice tailored to your needs.

Can I take out equity release if I have not paid off my mortgage?

Yes, you can gain equity release if you still have time left on your residential mortgage, but you will need to raise enough money to pay off your existing mortgage with your current provider.

Am I eligible for equity release?

To be eligible for equity release, you need to be a UK homeowner aged over 55.
All equity release applications are subject to the lending criteria of different product providers. We are always happy to answer any questions you may have.

If I release equity, can I remain living in my home?

Yes, you need to remain in your home for as long as you are alive or until you move into long-term residential care. You will need to abide by the terms and conditions of your plan.

Will my family end up in debt because of equity release?

No. All equity release products, that we recommend have a ‘no negative equity guarantee’. This means that when the debt is repaid, which is when the last remaining borrower dies or goes into long term care, the amount to be repaid will never be more than the value of your home.

Will I have to pay tax on the equity I release.

No. Any lump sum or income you see received via equity release is tax-free.

However, any money left on deposits or other forms of investment could become taxable if you gift money from the proceeds of equity release. This could have implications for your estate planning, and our team can discuss this with you.

Do I have to pass any credit or affordability checks?

No. Unlike residential mortgages, equity release schemes are not dependent upon repayment ability. So having a good credit history is not essential. We can research the whole of the equity release market to find the best product for you.

Can I release equity on my holiday home, second home or buy to let property?

At this time you cannot, but previously you could of, with lenders looking into the viability once more. There were different products, including Lifetime Mortgages, tailored to homeowners with these types of properties, but they are available with more stringent lending criteria.

If I release equity, can I move house?

Yes, with Lifetime Mortgage plans, you have the freedom to move to another home, subject to certain criteria being met.

Can I still leave an inheritance for my family?

Yes. Equity release will reduce the amount of inheritance you can leave for your loved ones, some products can have an ‘inheritance protection guarantee’ built into them that enables you to protect a certain percentage of your property as an inheritance for your family.

Are there alternatives to equity release?

Yes, there are many alternatives to equity release, such as remortgaging, RIO mortgages, downsizing, state benefits, and more. We can talk you through the different options.

What can you do with the money that you release?

How you choose to spend the money that you release through equity release is entirely up to you. You can spend it on whatever you wish, from going on holiday to helping your family.