Published: March 16, 2021

Financial planning for retirement

How equity release can unlock the cash in your home.

There are many things to consider when planning for retirement, and ensuring you have enough income plays a big part of this to make sure you can live the lifestyle you want.

If you own a property in the UK and are aged 55 or over you could consider releasing equity in your property tax free, through a lifetime retirement mortgage. A sudden cash injection can give you peace of mind financially for retirement.

Should you release Equity?

As a homeowner you could use equity release as an option to release the cash that is tied up in your property whilst you live there. You can release part of the share of your home that you own as a lump sum or as monthly income. There are many things to consider financially, especially in retirement and it is always best to discuss your options with your family.

What to consider when releasing equity from your property?

If you are looking to release equity from your property, there are a few things to consider, which include:

• Ensuring you get sound financial advice before releasing cash from your home
• You must be a homeowner in the UK
• Aged 55+
• Borrowing a minimum of £15,000
• You have a mortgage or have a small amount left to pay off

Is equity release a type of mortgage?

Equity release is a term for unlocking the cash in your home and is most commonly referred to as a lifetime mortgage or retirement mortgage.

How much equity could I release as a cash lump sum?

The amount of equity in your home is based on how much your home is worth and how much you owe on your mortgage, so even if your mortgage isn’t fully paid off you can still take advantage of equity release by changing to a lifetime mortgage instead.

The amount of cash you can release as a retirement mortgage depends on your age and property value.

For example, if you are aged 60 and your property value is £400,000 you could be eligible to release up to £100,000.

Could I lose my home through equity release?

This a common fear of equity release, but the answer simply is NO. You will always retain the right to sell your property and leave it to who you wish. All equity release lifetime mortgage schemes are regulated by Financial Conduct Authority.

Do I still own my home if I have a lifetime mortgage?

A common misconception of equity release lifetime mortgages is that you will no longer own your home. With a lifetime mortgage you can rest assured that you will always be the homeowner.

If you considering releasing equity in your home, it is always best to speak to an expert financial planner or mortgage broker to ensure you receive the best deal and advice to plan for your retirement.