This guide will give you all the information that you need on releasing some of the equity in your property as tax-free cash.
The complete guide to unlocking cash from your home
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Contents What is equity release? Types of equity release
At The Equity Release Experts we believe everyone should have the freedom to do what matters to them. And we want you to enjoy the fulfilling, worry-free later life you deserve.
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Benefits and drawbacks of equity release Other later life mortgage options What other options are there? Is equity release right for me? Compound interest explained Lump sum vs drawdown Payment-term lifetime mortgage Interest-payment lifetime mortgage How would you spend your tax-free cash? How much could I release with a lifetime mortgage?
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How can I reduce the cost of my lifetime mortgage? 22 Other ways to reduce the cost of your lifetime mortgage 23 Considering the impact of house prices 24 Is equity release safe? 26 Equity Release Council guarantees 26 Flexible features for personalised plans 27 Can I tailor my lifetime mortgage? 27 The equity release process 28 What are the most commonly asked questions? 29 Why choose The Equity Release Experts? 30
To really understand your needs, it all starts with speaking with your local equity release adviser and you're in safe hands with The Equity Release Experts. We're part of Key Group, the UK’s largest provider of equity release services. Your adviser will consider all your options, including later life mortgages, downsizing and alternative forms of borrowing. And if they believe equity release is the most suitable option for you, they’ll search the whole market to find the right plan for you.
Equity release means the money your home has earned you doesn’t have to stay tied up in the bricks and mortar. Instead, you could access some of that cash, tax-free. It could fund the home improvements you want to make or the holidays you want to take. It could give you peace of mind by clearing existing
debts, big and small, and let you support family members when they need it most. Whatever your needs are, we’ll guide you through all your options, and you’ll never face any pressure from us to go ahead. We’re just here to give you honest, clear, independent advice.
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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 payments. How much you pay and the length of your payment period depends on the age of the oldest borrower and the plan. It’s a loan secured against your home, with variable eligibility criteria. 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. Types of equity release There are four different ways to unlock some of your home's value, tax-free, through equity release. At The Equity Release Experts, we search the whole of the equity release market to find the plan that works best for you. However, if your adviser believes an alternative mortgage product is more suitable, they'll tell you.
Are you eligible? You may be eligible for equity release if:
What is equity release? If you’re a homeowner aged 55 or over, equity release allows you to access some of the cash locked in the value of your home. You're aged 55 or over You're a homeowner with a property worth at least £70,000
Your property’s value, minus any outstanding mortgage or loans secured against it, is the equity. This equity is often passed on as an inheritance; however, an increasing number of people are tapping into some of this wealth to help boost their retirement finances. After years of working hard to make monthly mortgage repayments, your home is likely to be your biggest asset, particularly if you’ve benefitted from an increase in house prices over the last few decades.
An alternative way to release the equity in your home would be to sell it and downsize. However, leaving the family home isn't something everyone wants to do. And with people living longer and pensions typically not being what they once were, for many, savings have to stretch a lot further to last throughout retirement. That's why tens of thousands of people are already enjoying the benefits of unlocking some of the cash from their home through equity release. But we know it’s not suitable for everyone, which is why it’s important to get expert advice before you make a decision.
If equity release isn’t right for you, we may refer you to a Key Group mortgage specialist. Their fixed advice fee of £899 will only apply if you choose to go ahead with them.
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Benefits and drawbacks of lifetime mortgages and payment-term lifetime mortgages Like any financial product, equity release has benefits that are designed to help you, but also has drawbacks which are important to consider.
The interest can build up quickly Lifetime mortgages and payment- term lifetime mortgages are loans secured against your home and are subject to compound interest, meaning the amount you owe can grow quickly (see page 14 for an explanation of compound interest) Mandatory payments There’s a period of mandatory payments with a payment-term lifetime mortgage, and your home may be repossessed if you don't keep up with these payments Reduced or no property equity Equity release may leave you with limited or no property equity remaining and will reduce your financial options in the future Effect on estate & means-tested benefits Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits Long-term financial product These are long-term financial products and are not designed to be repaid early. If you do, early repayment charges may apply
Tax-free cash You can unlock cash from your home, tax-free, to help meet your needs in later life Stay in your home With a lifetime mortgage and payment- term lifetime mortgage you'll always own your own home and have the right to stay in your property for as long as you wish, however, with a payment- term lifetime mortgage you must ensure all mandatory payments are met Reduced or no monthly repayments You can make reduced or no monthly repayments with a lifetime mortgage. This is the same with a payment-term lifetime mortgage after its mandatory payment period ends, overpayments can be made, subject to lender's criteria No negative equity guarantee You’ll never owe more than your home's worth or pass on any equity release debt to your family, providing you keep to the terms of your plan You can still move house You have the right to move home in the future, subject to criteria
“Equity release allowed us to stay in our home and pay off our existing debts”
Mrs Fitzgerald, a nurse, and her husband, Paul, a self-employed carpenter bought their London home 22 years ago for £76,000. It has been their biggest investment, increasing in value by £349,000 since. Having taken out an interest-only mortgage, they thought they would be able to pay it off. In addition, the couple had also amassed £25,000 of credit card debt. “It was getting nearer to the end of our mortgage term and I was worrying about how we were going to pay off the £75,000 left as well as the credit card debt. We put our house on the market, but we couldn’t find anything we liked. We liked our house and the local area. This is why we looked into equity release. It allowed us to stay in our home and pay off our existing debts. The Equity Release Experts put us in contact with an adviser who gave us all the information we needed. We discussed our options and agreed on a plan suitable for us. Within five weeks it was complete.* For us, equity release was the answer.”
*Typical time to completion 8–12 weeks
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*Remember a mortgage is a loan secured against your home. Your home may be repossessed if you don't keep up repayments. Credit and affordability tests apply. A retirement interest-only mortgage (RIO) is a mortgage where you pay the interest every month until the plan ends. The original loan amount is repaid when the plan comes to an end, which is usually when you (or the last remaining applicant) either pass away or move into long-term care. A RIO is typically available to people aged 55 or over.* Later life residential mortgage If you think you’re too old for a standard mortgage or can’t find a conventional one to meet your needs, we can refer you to our expert mortgage advisers within Key Group to help. Mortgages can be used to buy a new property, remortgage an existing one, or release additional funds. It can be on a capital repayment or interest- only basis.* Retirement interest-only mortgages If your adviser believes that an alternative mortgage product may be suitable for you, they will refer you to another specialist within Key Group who'll search the whole mortgage market to find the right plan for you. Here are some examples of different products and solutions that may be right for you: Other later life mortgage options With The Equity Release Experts, your equity release adviser will consider other options during your advice process that may better suit your needs. And if another option is more suitable for you, we’ll tell you.
What other options are there?
Downsizing By selling your home and moving to a smaller or less expensive property, you may be able to generate a cash lump sum to help boost your finances in later life. This can be a viable alternative to borrowing against your property; providing you have an appetite for the housing market and aren’t looking to remain in your current home. Unsecured borrowing Typically, through an unsecured loan, you can borrow from £1,000 up to £25,000. The term of the loan and the monthly repayments are usually fixed. So, if you make all the required payments, the loan is guaranteed to be repaid at the end. Using existing assets If you’re able to use any existing assets to help meet your needs throughout later life, such as a pension or savings, your adviser will always recommend you do so before considering property and non-property-based borrowing. Grants and benefits Grants and benefits may be available to those on a low income who need help with a one-off expense or general living costs. There’s an extensive range of financial support available for many needs, such as housing costs, cost of living, and pensions. turn2us.org.uk is a national charity that can help you understand which grants and benefits may be suitable for you. Support from friends and family Could a friend or family member provide the financial support you need? Or are you expecting to receive an inheritance windfall in the future that could help you meet your needs? Although it could be a tricky conversation to tackle, receiving support from family or friends will likely be a much cheaper option than borrowing against your home or moving.
If equity release isn’t right for you, we may refer you to a Key Group mortgage specialist. Their fixed advice fee of £899 will only apply if you choose to go ahead with them.
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Is equity release right for me? At The Equity Release Experts, we understand that equity release isn’t suitable for everyone. That’s why we’ll always be honest and tell you if we don't believe it's the right option for you. To help, we’ve highlighted a selection of scenarios below where equity release could be the right option for your needs, and when it’s not. Your specialist equity release adviser will work with you to determine whether equity release or an alternative later life option is most suitable for you during your initial advice appointment.
How would you spend your tax-free cash? If you’re considering releasing a cash lump sum, you’ve probably already got an idea of how you want to spend it. Here are some of the ways you could spend the money you access through later life finance.
Examples of when equity release could be the right option I want or need to clear my existing mortgage I want to boost my finances and stay in the home I love I want or need to give my family a financial gift I want or need to make home and or garden improvements to make my property more comfortable in later life My retirement income is not sufficient to make the most of later life My health is declining and I need help with everyday care
Examples of when equity release isn't the right option I don't want to take the risk of being left with limited or no property equity remaining I’m able to afford an alternative product that would reduce my cost of borrowing I need to borrow less than £10,000 I’m not willing to repay any existing mortgage secured against my home I want to use the money for gambling or short-term borrowing needs I want to use the money for investment or business purposes
Paying off an existing mortgage
Gifting money to family
Going on holiday
Clearing existing credit cards and loans
Replacing the car
Making home and garden improvements
Things to consider You should always think carefully before securing a loan against your property to repay existing debt.
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How much could I release with a lifetime mortgage? If your adviser considers a lifetime mortgage as the most suitable option for you, you may be able to unlock thousands in tax-free cash from your home’s value. The amount you can release depends on your age, health, and how much your home is worth. On average, customers released 23%* of their property value in the first half of 2023. Generally, the older you are, the more you can release. This map shows the average release amount by region. *Key H1 Market Monitor, 2023
£65,482
£51,815
£58,889
£62,124
“I definitely felt I made the right decision and the whole process was spot on”
£61,795
£68,469
£74,438
£63,664
£61,989
£166,162
Sandra Eke, from Sidcup, South East London, enjoys an active lifestyle and after a career change she doesn’t plan on retiring anytime soon. Sandra decided to look into equity release as a way to help her daughter and three grandchildren to find somewhere to live. “I spent six months researching the idea before I made the decision to contact The Equity Release Experts and book an appointment with an adviser. She was honest and I felt that she looked after my needs. The whole process was a lot easier than I’d expected it to be.” When the money arrived in Sandra’s account, the first thing she did was help her daughter and three grandchildren to find a home, paying the first 12 months’ rent upfront. Sandra explained, “I’ve decorated throughout the house, had a new kitchen and bathroom fitted and rather than do it myself, I paid for someone else to do it. I was also able to take one of my grandchildren to Tenerife to visit my sister who lives over there. I’ve already recommended equity release to some of my friends – in my view, you should enjoy the money whilst you’re still alive. I definitely felt I made the right decision and the whole process was spot on.”
£95,692
£83,878
Calculate how much you could release for free using our simple equity release calculator at www.equityrelease.co.uk
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Compound interest explained Unless you choose to do so, there are no repayments to make on a lifetime mortgage until the plan comes to an end. As a result, a lifetime mortgage is subject to compound interest. Compound interest is different to the interest added to a residential mortgage or personal loan. How does it work?
interest already accrued), not just the amount you initially borrowed. This means a larger amount of interest is added to your lifetime mortgage every period. And this cycle continues until the plan ends. Without making payments, this can significantly reduce the equity remaining in your home and leave you with limited financial options in the future. This could mean you're unable to remortgage to a cheaper product in years to come, reduce your ability to privately fund any future care costs, or restrict your options to move home in the future.
With a lifetime mortgage, interest is added either monthly or annually depending on your plan. During that first month or year, interest is charged and added to the amount of money you’ve borrowed, otherwise known as your initial loan amount. The amount of interest added will depend on your initial loan amount and interest rate. If you’ve had a residential mortgage or personal loan in the past, you’ll know the interest added is based on the amount you originally borrowed. But with a lifetime mortgage, that’s not the case. Instead, the interest is calculated and charged on what you owe (your initial loan amount plus the
By not making payments towards your lifetime mortgage, you not only reduce the value of your estate, but also restrict your financial options in the future; with less equity to draw from should you need it. With that in mind, it’s important to consider both your current and long-term needs and circumstances before choosing whether to go ahead with equity release. And if you decide a lifetime mortgage is right for you, it’s always recommended to make payments towards your loan to help reduce the impact of compound interest. You can read more about how to reduce the cost of your lifetime mortgage on page 22.
The table shows the impact compound interest has on a lifetime mortgage if you choose not to make repayments. In this scenario, the customer has released £82,475 from their £288,000 home. Their lifetime mortgage accrues £5,349 of interest in the first year. In year 2, as interest is charged on the outstanding balance (£87,824), not the initial loan amount (£82,475), £5,695 is accrued in interest – £346 more than in year 1. In year 3, £6,065 is added in interest – £370 more than in year 2 and £716 more than in year 1. This cycle then continues for the life of the plan, which is usually until you or the last remaining applicant passes away or moves into long-term care. Thinking about the future With a lifetime mortgage, interest is added to the loan until it’s repaid. If you choose not to make any payments towards the balance, your remaining property equity will reduce quickly. For example, in the scenario above, the customer has over £188,000 in property equity after three years. But that reduces to less than £77,000 by year 15. And by year 20, the customer has no property equity remaining – although the customer will never owe more than their home's worth as a result of the no negative equity guarantee.
An example of how compound interest accrues over 20 years Balance at the start of year Interest (6.3% MER) 1 Balance at the end of year 2
Remaining property equity 3
£82,475 £87,824 £93,519 £198,778 £272,153
£5,349 £5,695 £6,065
£87,824 £93,519 £99,584
£200,176 £194,481 £188,416
Year 1 Year 2 Year 3
This cycle continues for the life of the plan
£12,891 £17,649
£211,669 £289,802*
£76,331
Year 15 Year 20
£0
This example is for illustrative purposes only and uses the average release amount of £82,475 and monthly equivalent rate (MER) of 6.3% – Key Market Monitor H1, 2023. Average UK house price of £288,000 – ONS, August 2023. 1. Interest rate: The rate at which interest is applied to the loan – in this case, monthly (MER). With the lifetime mortgages we recommend your interest rate is fixed for life. This column shows how much interest has been added to the loan that year 2. Balance at the end of the year: How much is owed at the end of the year, including compound interest 3. Remaining property equity: The difference between how much your property is worth and the outstanding balance of your lifetime mortgage *Although the balance at the end of the year is higher than the property's value, you'll never owe more than your home's worth with a lifetime mortgage that meets Equity Release Council Standards, thanks to the no negative equity guarantee. Read more about this on page 26.
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Lump sum vs drawdown With a lifetime mortgage, there are two ways you can access your tax-free cash. One is taking all of the money in one go; known as a lump sum, and the other enables you to take it in chunks as and when you need it, following an initial release. This is known as a drawdown lifetime mortgage. How a drawdown lifetime mortgage works
Example of how a drawdown lifetime mortgage could reduce your cost of borrowing Mrs Lewis and Mr Davies both want to release £81,703, but opted to take it out in different ways to meet their requirements.
£81,703 TOTAL BORROWING AMOUNT Lump sum case study
Drawdown case study
A drawdown lifetime mortgage offers more freedom than a lump sum plan, allowing you to release money when you need it. Firstly, you agree an overall sum of money you can borrow. You then take an initial sum and have the option to release further amounts when needed, subject to a minimum release.
Things to consider Your lender may have the option to withdraw the additional borrowing facility and if you choose to make a drawdown, the funds will be subject to the prevailing, fixed interest rate at the time. This new rate may differ from your original interest rate. Benefits of a drawdown lifetime mortgage More flexibility Release funds from your cash reserve as you need it. This gives you the freedom to use as little or as much as you want depending on your circumstances at the time, subject to criteria. Smaller impact on benefits Because you’re in control of when you release the money, you can organise drawing down funds in a way that will help reduce the effect on any means- tested benefits. Less interest to pay Interest only accrues on the funds you draw down once they’re released, so you’ll have less of it to pay. Plus, no interest accumulates while your funds are still sitting in the reserve.
£51,703 INITIAL BORROWING
£15,000 YEAR 10
£15,000 YEAR 5
£81,703 TOTAL BORROWING AMOUNT
Benefits of a lump sum lifetime mortgage Lower interest rates
Lump sum lifetime mortgages sometimes come with a lower rate of interest compared to a drawdown lifetime mortgage. Interest rates don’t change When you release further funds from your drawdown lifetime mortgage, the money released is subject to the prevailing interest rate at the time. With a lump sum lifetime mortgage, however, your interest rate is fixed for the entirety of your plan. Taking all your available cash in one go will limit your future borrowing options. As interest accrues on the full amount taken from day one, the amount you owe will increase faster.
Mrs Lewis Mrs Lewis decided to take out all her money in one go through a lump sum lifetime mortgage. As interest is charged on the full release amount from day one the total cost of borrowing after 15 years could be £223,915 (based on a monthly rate of 6.74%) on her loan of £81,703.
Mr Davies Mr Davies decided to take out an initial loan of £51,703 to meet his immediate requirements, then make two further £15,000 drawdowns over time (year 5 and 10). As he took out his money in stages, his total cost of borrowing was lower as interest is only charged when the funds were released.
Total cost of borrowing after 15 years £223,915
Total cost of borrowing after 15 years £191,064
Over the same 15-year period, borrowing the same amount of money, Mr Davies saved almost £32,851 in interest charges compared to Mrs Lewis.
This example is for illustrative purposes only and uses the average release amount of £81,703 and monthly equivalent rate of 6.74% (future drawdowns will be charged at the prevailing interest rate) – Key Market Monitor Q1, 2023.
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Payment-term lifetime mortgage A payment-term lifetime mortgage is a type of equity release that could allow you to release more tax-free cash at a lower rate of interest than you would otherwise be able to through a lifetime mortgage. In return, you commit to a specified period of mandatory payments. After the mandatory payment period ends, Is a payment-term lifetime mortgage right for me?
How a payment-term lifetime mortgage could work for you
CASE STUDY EXAMPLE Release more tax-free cash from your home Stephanie Higgins, aged 55, is a divorced nurse from Shropshire. She has an outstanding mortgage of £78,000 she wishes to repay. Stephanie tried to release equity previously but found she wasn't able to unlock enough money from her home to meet her needs. However, thanks to a payment-term lifetime mortgage, that’s about to change.
making further payments becomes optional. We would always recommend paying what you can to help manage your total cost of borrowing, as if you do stop making payments the impact of compound interest will increase. Even if you choose not to continue payments, you'll retain full ownership of your home and can continue to stay in it for as long as you wish. A payment-term lifetime mortgage is a loan secured against your home and subject to compound interest, meaning the amount you owe can grow quickly. Your home may be repossessed if you do not keep up with mandatory payments.
A payment-term lifetime mortgage could be the right solution for you if you need access to a tax-free lump sum and you’re able and willing to make mandatory payments, as you’ll need to pass an affordability check to take out a plan. There's no drawdown option with a payment- term lifetime mortgage. Read more about drawdowns on page 16. How much extra cash could I release? The amount of extra tax-free cash you could release depends on how much you need to borrow and your affordability. But by committing to a period of mandatory payments, you could unlock more of your home's value, tax-free.
Illustrative example
Lifetime mortgage 2
Payment-term lifetime mortgage 3
£286,000 £60,060
£286,000 £78,650
House value
Maximum release 1
6.83% MER
6.83% MER
Interest rate
£200 (Until Stephanie's 66th birthday, then £0 after)
Mandatory monthly payment
£0
Payment-term lifetime mortgage arrangement fee of £999 not included in calculation. With a lifetime mortgage, Stephanie is only able to release just over £60,000 from her £286,000 home. This leaves Ms Higgins a little under £18,000 short of the money she needs to clear her existing mortgage. However in this example of a payment-term lifetime mortgage, by committing to making mandatory payments of £200 until Stephanie's 66th birthday, she can release a further £18,590 – which gives Ms Higgins the money she needs to clear her existing mortgage. Stephanie can make voluntary ad-hoc or regular overpayments of up to 10% of the initial loan amount each year without incurring an early repayment charge to help manage her total cost of borrowing. Case study example. (1) The amount of tax-free cash this customer can release from their home through a comparable lifetime mortgage. We always recommend only releasing what you need. (2) Comparable lifetime mortgage. (3) Variant of a payment-term lifetime mortgage. Interest rates are for illustrative purposes only. Speak to your adviser for a personalised illustration. You may be able to release a higher amount with an alternative lifetime mortgage; however, the total cost of borrowing may be significantly more.
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Interest-payment lifetime mortgage Save thousands over the life of your plan, by choosing an interest-payment lifetime mortgage, opting to pay some or all of the interest can allow you to reduce the cost of your borrowing, or in some cases gain access to discounted interest rates. The longer you commit to making payments, the more you'll save on the cost of borrowing. However, should you choose to stop your payments, this may lead to you having to pay a charge and an interest rate increase on your plan.
CASE STUDY EXAMPLE
Interest-Payment Lifetime Mortgage
Lifetime Mortgage
£100,000 6.5% MER*
£100,000 6.2% MER*
Initial loan amount
Interest rate
£0
£532
Monthly payments
Total cost of borrowing after 20 years
£365,645
£249,436 (inc. payments)
Net saving £116,209 *Monthly Equivalent Rate. Interest rates are for illustrative purposes only. Interest rate received and plan features are subject to eligibility. Ask your adviser for a personalised quote. £0
CASE STUDY EXAMPLE How Margret saved over £116,000 by choosing an interest-payment lifetime mortgage Margret is a 71-year-old divorced retiree looking to release £100,000 from her £600,000 property to gift money to her grandchildren. She commits to paying 100% of the monthly interest for 10 years. By making monthly interest payments for 10 years, Margret can save more than £116,000 over 20 years compared to making no repayments.
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How can I reduce the cost of my lifetime mortgage?
Other ways to reduce the cost of your lifetime mortgage However, if you are unable to make repayments towards your lifetime mortgage, there are other options that could help to manage the size of your loan. Consider a drawdown plan However, a reduction in interest rates in the future isn’t guaranteed.
All of the plans we recommend come with options to help reduce the total cost of the borrowing if that’s important to you; for instance, if you wish to leave a larger inheritance. Making repayments Even though there are typically no monthly
With a drawdown lifetime mortgage, you only take out the money you need when you need it. This can help reduce your total cost of borrowing, as interest is only charged on the money you release, rather than the full amount available. You can read more about this on page 16. Remortgage to another equity release plan in the future If interest rates reduce in the future, you may have the option to remortgage your current plan to secure a lower rate. By paying a lower interest rate, you can reduce your total cost of borrowing.
It’s also important to remember that an early repayment charge (ERC) may be payable if you choose to remortgage your equity release plan. However, the plans we recommend come with fixed or gilt-based ERC's. Fixed ERC's are defined from the outset, usually based on a sliding scale e.g. as a percentage of the amount to be repaid. Gilt-based ERC's can vary depending on the gilt rate applicable at the time of repayment and are therefore not known at the outset ( although a maximum limit applies).
your total cost of borrowing would be £223,915*. However, by making a monthly £250 repayment, after 15 years, you’d owe £146,440 – with a total cost of borrowing, including repayments, of £191,440. This means, by repaying £250 a month, you, and your beneficiaries, could benefit from a £32,475 net interest saving.
repayments to make with a lifetime mortgage, all the plans we recommend come with the option to make ad-hoc or regular repayments to help reduce your total cost of borrowing. Even if you’re only able to make small repayments, it will help reduce the amount of interest you pay over the lifetime of your loan. In this example, if you were to borrow £81,703 and make no repayments at all, after 15 years,
How making repayments can help you manage your total cost of borrowing Total cost of borrowing making no repayments would be £223,915
Total cost of borrowing repaying £250/month would be £191,440 Net interest saving of £32,475
— £142,212
Interest accrued
— £81,703 Initial loan — £64,737 — £45,000
Repayments made
Interest accrued
— £81,703 Initial loan
Initial release amount of £81,703**. Plan subject to a fixed interest rate of 6.74%** MER. Interest and repayments shown over a 15-year period. *Based on a fixed 6.74% MER (Monthly Equivalent Rate) interest rate. **Key Market Monitor Q1, 2023
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Considering the impact of house prices If you’re considering equity release, it’s important to consider the value of your home now and in the future, as it will affect any potential inheritance you want to pass on.
Over the last few decades, average UK house prices have risen steeply; more than doubling in the last 20 years. If you take a lifetime mortgage and house prices continue to rise, you may build up more equity to leave to your loved ones, as the plan continues over time. Please remember that compound interest will continue to accrue over the term of the plan.
However, it’s also important to understand that house prices may fall during the life of your plan, which would reduce the amount of inheritance remaining. But we can recommend a lifetime mortgage where you never owe more than your home’s worth or pass on any equity release related debt to your loved ones. There’s more information available about the no negative equity guarantee, and others, on page 26.
“The money we released has also given our children a boost to get on the property ladder”
DAY ONE
AFTER 15 YEARS
Lifetime mortgage
Lifetime mortgage + interest
— £197,888
Equity remaining in your home
— £281,616
Retired couple Patrick and Christine from Buckinghamshire were looking for a way to pay off their existing interest-only mortgage. “Although we had savings to pay this off, it would leave us with little money in retirement. We didn’t want to be left with no savings. After looking online, The Equity Release Experts appeared to be the most respected and knowledgeable company to turn to. We did our research and agreed that this would be the most suitable option for our needs." “We contacted The Equity Release Experts, who organised an adviser to visit us and discuss our options. He was very helpful and there was no pressure to proceed. When we decided to go ahead, the process was very smooth and we felt relieved to have finally paid off our existing mortgage. The whole time it felt like something was hanging over us and now we can just enjoy our retirement without worrying. The money we released has also given our children a boost to get on the property ladder. It has been nice to help them when they need it the most.”
Equity remaining in your home
— £223,914
Lifetime mortgage plus interest
— £81,703
Lifetime mortgage
Property value £363,319
Property value £421,802
House price growth can help build further equity in your property which can be passed on as an inheritance or accessed again in the future through equity release.
This example assumes a fixed interest rate of 6.74% MER (Monthly Equivalent Rate) and house price inflation of 1%. Please note that these are only examples and the value of your house could go down or not increase at the same rate. Lifetime mortgage amount and property value are based on the average values in the Key Market Monitor Q1, 2023.
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Is equity release safe? Yes, all our equity release advisers have specialist qualifications and you can only take out equity release if you’ve received advice from a qualified adviser. It’s important you get that support to help you make the right choice.
Flexible features for personalised plans Here’s an overview of the flexible features Partial capital repayments Make voluntary, ad hoc payments of up to available with the lifetime mortgages we recommend, which are, specifically designed to help put you back in control
10-12% of the initial amount you’ve borrowed each year (without incurring an early repayment charge) and reduce the size of the loan on which interest is charged, subject to lender criteria Downsizing protection If, for any reason, you need to move home after taking out a lifetime mortgage, you can pay the loan back early, subject to lender criteria, without incurring an early repayment charge if the new property doesn’t meet your plan’s criteria. Early repayment charges We recommend lifetime mortgages which offer either fixed or gilt-based ERC's. With fixed ERC's you will always know what the charge will be should you wish to repay your loan early.
As an extra safeguard, we’re a member of the Equity Release Council (ERC) and recommend lifetime mortgages and payment-term lifetime mortgages that meet ERC standards.
of your later life finances. Lump sum or drawdown
Choose to release a lump sum of tax-free cash or take out an initial amount and draw down money in stages. With a drawdown, you only ever pay interest on the portion of your facility
We recommend lifetime mortgages and payment-term lifetime mortgages that meet Equity Release Council standards and come with the following guarantees: Stay in your house You'll retain full ownership of your home and can stay in it for as long as you wish* You can still move home You have the right to move home in the future, subject to criteria No negative equity guarantee You'll never owe more than your home's worth or pass on any equity release related debt to your family, provided terms and conditions are met Fixed interest rate Your interest rate is fixed for the life of your loan, so you’re protected against any future rate rises Flexible payment options There are typically no monthly repayments to make with a lifetime mortgage, but you have the right to make voluntary payments without incurring an early repayment charge, subject to lending criteria. With a payment-term lifetime mortgage, you make mandatory payments* for a set time period, however, after that you can make reduced or no monthly payments. Overpayments can also be made, subject to lenders criteria. Things to consider It’s important to remember that a lifetime mortgage and payment-term lifetime mortgage may leave you with limited or no property equity remaining and they'll reduce your financial options in the future. Lifetime mortgages and payment-term lifetime mortgages are loans secured against your home and are subject to compound interest, meaning the amount you owe can grow quickly. *There’s a period of mandatory payments with a payment-term lifetime mortgage, and your home may be repossessed if you don't keep up with these payments. Equity Release Council guarantees
that you have withdrawn. Optional repayments
With a lifetime mortgage, there are typically no monthly repayments to make, as the loan, plus roll-up interest, is repaid when the plan comes to an end. However, there are benefits to making repayments if you can afford to do so.
Can I tailor my lifetime mortgage? We recommend lifetime mortgages which allow you to personalise the features and protections of your plan so you can live the later life you want. Equity release can only be taken following qualified advice and your equity release adviser will talk you through the features available based on what you’d like to do. Don’t forget, some of these features may be available on other products, and your adviser will talk you through your options as part of your advice journey. What’s important to you? Lifetime mortgage feature I’d like to reduce the size of the loan on which the interest is charged Partial capital repayments I want to take some money now and come back for more at a later date Drawdown I’d like to be able to move home if my circumstances change Porting, subject to criteria I want to take all my money in one go Lump sum It’s important I always remain the owner of my home Lifetime mortgage I don’t want to ever owe more than my home is worth Lifetime mortgage
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We’ll support you through the equity release process, step by step Speak to an expert A specialist will answer initial
What are the most commonly asked questions about equity release? Is equity release regulated?
What do people usually use the money for? Our customers spend the tax-free cash they release on many different things – some of the most popular are home improvements, repaying existing debts and clearing an existing mortgage. You should always think carefully before securing a loan against your home to repay existing debt. Can I take out equity release if I still have a mortgage? Yes; however, you’ll need to repay the mortgage using the money released. Any funds left over are yours to enjoy. What happens when I pass away? Your home will usually be sold once you and your partner either pass away or move into long-term care. The sale proceeds will be used to repay the amount you owe, and any money left will go to you or your estate. How is my home’s value assessed? Your property will be valued by an independent RICS registered surveyor so you can be confident of an unbiased opinion of your property’s worth, for mortgage purposes. How much does equity release cost? There are associated costs with equity release in the same way there is with a regular mortgage, these can include fees such as surveyor’s valuation and solicitors fees. An adviser will always talk through any costs involved initially, as each plan is different. Unless you decide to go ahead, our service is completely free of charge, as our fixed advice fee of £1,999 would only be payable on completion of a plan.
Yes, equity release is regulated by the Financial Conduct Authority (FCA). Expert advice is also required before you can take out a plan. Will I still own my home? With a lifetime mortgage and payment-term lifetime mortgage you'll always own your own home and have the right to stay in your property for as long as you wish, however, with a payment- term lifetime mortgage you must ensure all mandatory payments are met. Will I ever fall into negative equity? All the lifetime mortgages we recommend meet Equity Release Council standards and come with the no negative equity guarantee, meaning you'll never owe more than your home's worth providing you keep to the terms of your plan. However, both a lifetime mortgage and a payment-term lifetime mortgage may result in limited or no property equity remaining and will reduce your financial options in the future. Can I move house? Yes, your plan can be transferred to a new home (subject to criteria). Who handles the legal side of the process? An independent solicitor will need to be appointed to handle the legal side of the process for you. We want to make sure you’re comfortable with your decision, so can suggest solicitors with lifetime mortgage experience if you prefer. What is compound interest? All the lifetime mortgages we recommend are subject to compound interest. That’s where you pay interest not only on the original loan amount itself, but also on the interest that’s already been added. You can read more about this on page 14.
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questions you might have and arrange a consultation with a local, expert equity release adviser
Talk to your family We encourage you to discuss equity release with your family and invite them along to appointments
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First appointment A dedicated adviser will discuss the options available and find out more about your particular circumstances and requirements
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Finding the right plan Should you decide to proceed, your adviser will search the whole of the market, to find the most suitable plan
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Second appointment Your adviser will present their recommendation and answer any questions you may have. Your adviser will also provide a personalised illustration Offer issued You’ll be issued with an offer following a satisfactory valuation including full terms and conditions of your plan for your approval
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Starting the paperwork Should you decide to proceed, the paperwork will be submitted and your property will be valued by an independent surveyor
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Legalities Independent solicitors acting on your behalf will cover the legal aspects
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Complete in 8–12 weeks Although a timescale can’t be guaranteed, this is the typical time it takes from application to completion
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If equity release isn’t right for you, we may refer you to a Key Group mortgage specialist. Their fixed advice fee of £899 will only apply if you choose to go ahead with them.
Money released Time to start enjoying the money released
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Why choose The Equity Release Experts? We’re the independent equity release expert and we search the entire market to find the right plan for you. As we’re completely independent we’re not tied to any lenders. We’ll compare all your options, including later life mortgages, downsizing and other forms of borrowing and recommend the option that’s most suitable for you. Being part of Key Group, we’re able to offer you award-winning customer service that’s second to none. From our UK-based contact centre to our fully-qualified advisers, you’ll deal with industry experts throughout your entire equity release journey. Why not find out for yourself what makes The Equity Release Experts so unique? Meet with a qualified adviser at home or speak to us over the phone for a free no-obligation consultation to find out more about unlocking some of the cash from your home and ask us any questions you may have. Unless you decide to go ahead, The Equity Release Experts’ service is completely free of charge as our fixed advice fee of £1,999 would only be payable on completion of a plan.
Whole of market We search the whole of the market to find the right plan for you, including:
Independent impartial advice
A face-to-face appointment in your home or over the phone if you’d prefer
Award-winning Being part of Key Group, we’re able to offer you award-winning customer service that’s second to none. From our UK-based contact centre to our fully-qualified advisers, you’ll deal with industry experts throughout your entire journey.
A personal case handler who will take care of all the paperwork for you
Mortgage Strategy Awards 2023 Best Equity Release Broker
Financial Reporter Awards 2022 Best Later Life Broker
Personal Finance Awards 2022 Best Equity Release Adviser
Your local expert is there when you need them
Trusted broker We’re the UK’s most trusted equity release broker with more 5-star reviews than anyone else. Key and The Equity Release Experts are part of Key Group the largest UK provider of equity release services.
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Find out how we can help... Book a free, initial consultation with one of our independent experts Call FREE 0800 531 6036 www.equityrelease.co.uk
32 The Equity Release Experts is a trading name of Key Retirement Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 02457440. Registered Office: Baines House, 4 Midgery Court, Fulwood, Preston, Lancs PR2 9ZH. Telephone: 0345 165 5955. TERE264.1 (01/25). © Key Retirement Solutions Ltd 2025
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