Types of equity release There are four different ways to unlock some of your home's value, tax-free, through equity release. At Key, our equity release advice only relates to our lifetime mortgages, payment-term lifetime mortgages and interest-payment lifetime mortgages. However, if your Key adviser believes an alternative equity release product is more suitable, we'll refer you to another specialist within Key Group who'll search the whole market to find the right plan for you. Lifetime mortgage A lifetime mortgage gives you access to some of the tax-free cash tied up in the value of your home while allowing you to retain full ownership. It’s a loan secured against your property, and to be eligible, you need to be aged 55 or over and your property needs to be worth at least £70,000. Payment-term lifetime mortgage A payment-term lifetime mortgage could allow you to unlock more of your home’s value than a lifetime mortgage. In return, you must make monthly repayments until you, or the oldest applicant, turn 66. It’s a loan secured against your home, only available to people aged 55–62 at the outset, and your property needs to be worth at least £125,000. A payment-term lifetime mortgage is subject to an affordability check and your home may be repossessed if you don't keep up with mandatory payments. Interest-payment lifetime mortgage When you release cash through an interest-payment lifetime mortgage, you agree to make monthly interest payments of between £25–100% of the interest added to your loan each month to help reduce your total cost of borrowing. If you’re able to make full interest payments for the life of your plan, it’ll leave you with only the amount borrowed to pay at the end. An interest-payment lifetime mortgage isn’t subject to affordability tests, however, agreed payments must be sustainable as there may be a penalty for stopping payments early. Home reversion With a home reversion, you sell all or part of your property to a reversion company in exchange for a cash lump sum, with no interest to pay on the money released, and no monthly payments to make. When the plan comes to an end, the home reversion provider takes its percentage share of the sale proceeds. You need to be 65 or over. Available through Key Group
If another product is more suitable, we'll refer you to a different adviser within Key Group who can help. If you go ahead, you'll only be charged the same £1,299 advice fee you’d pay with Key, even if their fee is usually higher.
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