The basics
What age do I have to be?
A lifetime mortgage is available from age 55. Generally, the older you are, the more you can release, since the plan is expected to run for a shorter time.
Will the house still be mine?
Yes. Ownership stays with you and you carry on living in your home.
Will I have to pay something back each month?
Not with a lifetime mortgage. Most let the interest roll up, and the loan is repaid when you die or move into long-term care. Some also allow optional payments, which can bring down the total cost. A retirement interest-only (RIO) mortgage works differently: you pay the interest every month.
Is it possible to end up owing more than the house is worth?
Not through an Equity Release Council member. Council standards include a no negative equity guarantee, so what you or your estate repay can never be more than the value of your home.
How much will advice cost?
Your first conversation is free. If you choose to go ahead, I'll set out every fee and cost in writing before you commit to anything.
Costs and repayments
What rate of interest will I be charged?
Rates differ from lender to lender and plan to plan, and they change over time. Equity Release Council standards require the rate to be fixed or capped for life, so you will know the most it can ever be. The rate and the total cost are shown in your personalised illustration.
How fast does the loan grow?
When interest is added to the loan it can grow quickly, since you are charged interest on interest already added. Paying some or all of the interest, where the plan lets you, slows that down. The calculator shows an illustration.
Is interest the only cost?
No. There can be arrangement, valuation and legal fees, and some plans charge if you repay early. Any fees I charge will be confirmed in writing before you go ahead, and your personalised illustration should list every cost.
Can I pay the loan back early?
Usually you can, although some plans apply an early repayment charge, and others let you repay without one. Ask about early repayment charges and any repayment allowance before you decide.
Can I have the money in stages?
Yes. With drawdown you take a first amount and keep a reserve to use later, paying interest only on what you've taken. The lifetime mortgages page has more on this.
What can I spend the money on?
Most plans leave that up to you. People commonly use it for home improvements, clearing a mortgage or debts, helping their family and boosting retirement income. We can talk about whether it fits what you have in mind.
Could it change what benefits I get?
It might. Money you release can count towards means-tested benefits, such as Pension Credit. Check before you decide, and I can talk you through how it might affect you.
Your home and your family
What if I want to move home?
Equity Release Council standards include the right to move to another suitable property, subject to the lender's criteria. In practice the plan may be able to move with you to the new home, or you can repay it. Read the terms of any plan before you commit.
What happens when I die or need long-term care?
The loan and interest are repaid, usually by selling the home. Whatever remains goes to your estate. Because of the no negative equity guarantee, your estate will never owe more than the home is sold for.
Will there be less for my family to inherit?
Yes. Inheritance protection can set aside a share for them, but it reduces how much you can borrow. You can also make payments towards capital and interest, or interest only. It helps to speak to your family early on, and they are welcome to join our conversations.
Can I still release equity with a mortgage in place?
In most cases, yes. The existing mortgage is paid off from the money released and you receive what is left. You can include it in the calculator.
Advice and next steps
Will I have to travel to meet you?
No. I work with clients remotely, so you can speak to me from home. A few stages involve other people, such as the lender's valuation and seeing a solicitor, and I'll explain how each one works.
Do you cover every kind of equity release?
I advise on lifetime mortgages and retirement interest-only (RIO) mortgages only. If neither is right for you, I'll say so and talk through the alternatives.
Do I have to see a solicitor?
Yes. Equity Release Council standards require you to take independent legal advice from a solicitor before you go ahead. We will arrange this on your behalf. It's a safeguard for you.
How long does the process take?
It is typically a matter of weeks from application to funds, depending on the lender and the solicitors involved. There's no need to hurry, and you can take as long as you like to decide.
Is equity release regulated?
Lifetime and retirement interest-only mortgages are regulated by the Financial Conduct Authority, and Equity Release Council members follow additional standards. Avalon FS Ltd, the firm I advise through, is authorised and regulated by the FCA and is a member of the Council. The details are in the footer of every page.
Got another question?
Just ask. Your first conversation is free and you're under no obligation.