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Is equity release right for you?

The advantages of choosing equity release include:

  • You can get a lump sum, a regular income, or both, and you don’t have to move house.
  • A reputable plan will guarantee that you’ll be able to continue living in your home until you die or go into long-term care.

Disadvantages can include:

  • With a lifetime mortgage, the interest is added to the amount you owe. As you are paying interest on the interest, the amount you owe can grow quickly.
  • You will get far less than full market value if you sell some or all of your property through a home reversion scheme.
  • Getting a lump sum or regular income may mean you stop being eligible for means-tested benefits, now or in the future.
  • If you want someone such as a relative, carer or new partner to move in, contact your provider. They may not have the right to stay living there after you die or move into long-term care.
  • If you die soon after taking out a reversion scheme, you could have sold off your home (or part of it) cheaply - although some schemes give families a rebate if you die within the first few years of signing up.
  • If you decide to repay the plan early, there could be a substantial early repayment charge.

Impact of equity release on benefits

You need to consider the impact of any benefits that you receive when you enter a scheme, and be aware of the possible impact on any benefits that you may become entitled to in the future.

If you receive any means-tested benefits, they may be reduced or lost entirely. This will depend on your circumstances and the type of equity release scheme that you choose.

A specialist independent financial adviser will be able to advise on what will happen to your benefits if you take out an equity release plan.

For more information: Call Age NI Advice: 0808 808 7575

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