Using equity release

You receive a tax-free cash lump sum and can arrange access to further amounts as and when required on some products.
You can use the cash for a number of purposes.
You can stay in the home you love for the rest of your life – no need to downsize.
You do not have to repay any of the cash borrowed until the property is sold, either on your death or if you move into long-term care.
You can have the option to guarantee an inheritance for your family on some products.
You will continue to be responsible for the maintenance of your property.
You have the right to move your equity release plan to another suitable property without any financial penalty.
With some products, if you decide to repay early, there may be substantial early repayment charges.
It will reduce the value of your estate, or the inheritance you leave to your dependants.

Our equity release advice service can provide a simple 3 step process where one of our equity release specialists will discuss your circumstances, review your eligibility, and, if appropriate, arrange an appointment with one of our qualified equity release advisers. And, because releasing equity can affect your eligibility for means-tested state benefits, we carry out a full review to ensure you are not missing out on anything you are entitled to.

See how much you could release using our calculator then read more about our equity release advice service or call 0800 0150993 to see how we could help. You can also watch a video all about our equity release advice service at the bottom of this page.

Our equity release advice service could help you decide if equity release is right for you. It comes with a no obligation guarantee - meaning the advice and arrangement fee of £1,100 is only payable if you decide to take out a recommended plan.

Watch our video on equity release

Want to know more about what equity release is? Check out our short animated film below!

What is equity release?

Do I qualify for equity release? +

To be considered for equity release:

You must be 55 or over* (youngest applicant if a couple)
You own a UK based home of standard construction, which is your main residence.
Your home must be worth at least £70,000*

*Minimum age and property value varies between product providers.

If you have an outstanding mortgage secured against the property then this must be repaid in full using the amount released (if available), by other means or by a combination of the two. Using equity release to repay an existing mortgage could increase the total cost in the long term.

What can I use equity release to fund? +

You can use equity release to fund a number of things from new cars to home improvements.

Common reasons for taking out equity release include the desire to maintain a certain lifestyle into retirement and to finance one-off events, like the holiday of a lifetime.

Types of equity release +

There are two main types of equity release plan: lifetime mortgages and home reversion plans.

Lifetime Mortgage

A lifetime mortgage is a type of loan, secured against your home, which allows you to release a cash lump sum (or, with some plans, take smaller amounts as and when you need them) from the value of your property.

You may qualify for an enhanced lifetime mortgage - a form of equity release that could allow more cash to be released from your property than a standard lifetime mortgage, depending on lifestyle and medical factors that are taken into consideration.

You could qualify if you have one or more of these health or lifestyle issues:

smoker
overweight
high blood pressure
diabetes requiring tablets/insulin
a medical condition such as angina, heart attack, cancer, multiple sclerosis or Parkinson's disease
retirement due to ill health.

Lifetime mortgage
Advantages	Disadvantages
You continue to own your home and will benefit from any house price rises.	This is a lifetime commitment, but there may be an early repayment charge if you decided to repay your mortgage early.
You are able to stay there for the rest of your life or until you move into long-term care.	The interest accumulated on the loan can be significant and will reduce the value of your estate.
There are normally no regular payments to make and nothing has to be paid back until the end of the plan. This usually happens when the last plan holder living in the property moves into long-term care or dies.	Taking out a lifetime mortgage could affect the amount of means tested benefits you receive.
If you qualify for an enhanced lifetime mortgage you could release more money from your home.	Charges for equity release advice, valuation fees and solicitors fees may apply, as well as admin fees.
Most plans feature a 'no negative equity' guarantee which means you will never owe more than the value of your home when it's sold following death or moving into long-term care.
You can choose to take the money you release as either a lump sum, as regular payments or on an ad hoc basis when you need it.
Interest is only charged from the day you take the funds.
You can take as little as £10,000 initially and could have access to further smaller amounts as and when required.

Home Reversion

Home reversion plans involve selling part or all of your home to a home reversion provider in return for a cash lump sum, which is usually higher than the sum you can raise from a lifetime mortgage.

When you die or move into long-term care, the property will be sold and the reversion company receives its share of the proceeds.

Home reversion
Advantages	Disadvantages
Whilst all or part of your home will belong to someone else, you can remain living there for the rest of your life rent-free, or for a nominal amount.	You're responsible for the maintenance of your home.
A home reversion plan is not a loan and so there’s no interest to pay.	You will not benefit from any increase in property value for the share that is owned by the home reversion company
If your property increases in value, you will still benefit from the increase in value of the proportion you still own.	You will receive significantly less than the current market value for the share of the property you sell. This is because the reversion company who buys your home cannot sell it until you die or move into long-term care and so need to protect themselves against any potential loss in value.
You won't suffer from any decrease in property value for the share of your home that is owned by the home reversion company.	A home reversion plan is a lifelong commitment and if you decide to buy back your share of your home you will need to do so at the current market value.
You have no repayments to make as the home reversion provider receives their share of the value of the property value when it is sold upon death or moving into long-term care.	It will reduce the remaining equity you have by the share of your property that you sold and you won't benefit from any increase in property value for the share that is owned by the home reversion company.
You know from the outset the share of your home you retain for your estate.	If you die shortly after taking out the plan, you will have effectively sold a share of your home very cheaply (some providers do offer protection against this with an early death clause).
	Charges for equity release advice, valuation fees and solicitors fees may apply, as well as admin fees.
	Taking out a home reversion plan could affect the amount of means tested benefits you receive.

How is the equity release industry regulated? +

From 2007, all lifetime mortgage and home reversion plans became regulated by the Financial Conduct Authority, or 'FCA' (formerly known as the Financial Services Authority, or 'FSA'), the independent watchdog that regulates financial services. In addition, all those advising on equity release had to pass a series of professional exams to be able to advise customers on equity release.

The FCA has clear guidelines to regulate the sale of equity release products to you. This includes spelling out the advantages and disadvantages of the plan, telling you how it will affect your entitlement to state benefits, and outlining the fees payable for any advice you receive.

Any firm advising you on equity release should provide you with two documents. One outlines key facts about the service they provide and what it will cost you; the other is provided when they recommend a product to you and is called a Key Facts Illustration, which sets out all the important features and risks of the equity release plan so you can compare it with similar products.

You should only ever get financial advice from a company that is registered with the FCA (check on the FCA Register here). If they aren’t and things go wrong, you won't have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme.

The Financial Services Compensation Scheme (FSCS) is the compensation fund of last resort for customers of authorised financial services firms. You may be entitled to compensation from the scheme if the financial services firm cannot meet its obligations. This depends on the type of business and the circumstance of the claim. Further information about compensation arrangements is available from the FSCS website – www.fscs.org.uk.

The Financial Ombudsman Service is the official independent expert in settling complaints between consumers and businesses providing financial services.

HUB Financial Solutions Limited is authorised and regulated by the Financial Conduct Authority, our firm reference number is 455713. You can check by looking for our number on the register.

How am I protected? +

HUB Financial Solutions Limited is a member of The Equity Release Council, whose aim is to ensure that equity release products are safe and reliable so that consumers can have confidence and peace of mind with equity release.

This industry body represents the majority of the equity release market in terms of volume and its members include the leading providers of lifetime mortgages and home reversion plans.

The Equity Release Council Statement of Principles set strict criteria to which members must adhere. This Statement of Principles puts in place safeguards for consumers to ensure that they can have confidence in Equity Release Council members and their products and services.

The Statement of Principles states:

All products must allow you to remain in your property for life, providing the property remains your main residence.
All products must be clear and simple in the way they are presented to you. It should include all costs you have to bear in setting up the product as well as tax implications, your position on moving house and the effects of changes in house values on your loan.
You have the right to move to another suitable property without any financial penalty.
All legal work associated with an equity release product must be completed by a solicitor of your choice.
You are aware of the terms and implications of the product including the impact of equity release on your estate.
You will never leave your estate with a debt that is more than your house is worth (the 'no negative equity' guarantee).

The Financial Services Compensation Scheme (FSCS) is the compensation fund of last resort for customers of authorised financial services firms. You may be entitled to compensation from the scheme if the financial services firm cannot meet its obligations. This depends on the type of business and the circumstance of the claim. Further information about compensation arrangements is available from the FSCS website – http://www.fscs.org.uk/.

Indicative lifetime mortgage tool