Equity Release: Lifetime Mortgage
A lifetime mortgage will set you up with a cash lump sum, and you’ll keep your home. You won’t make repayments until you’ve gone into full-time care or you’ve passed away, and you can then use this lump sum to pay off debts, or towards a new income stream such as a second home for renovation or rental.
Equity Release: Drawdown Lifetime Mortgage
You could also choose a drawdown lifetime mortgage. This works in much the same way but, rather than being given the lump sum, it’s essentially a credit allowance that you can draw money from as and when you need it. The benefit of this is that you’ll only owe interest on what you’ve borrowed, rather than the whole amount, which protects more of your estate in future.
Equity Release: Home Reversion
Finally, if you’re over 60 you could instead choose home reversion. Here you’ll sell your home but retain the right to live in it. Again, you could take a cash lump sum, although some reversion plans will instead offer regular payments. If having these regular payments into your account would make it easier for you to budget, then this may be a favourable option for you.
Equity Release: Retirement Planning – Hobbies and Holidays
It’s worth remembering that retirement planning isn’t always about financial security. You may be in a healthy financial position with a pension (see the government pension guide) that has set you up for retirement. That’s when you might want to consider equity release to fulfil a life’s dream, whether that’s a new hobby that requires an initial investment, or a holiday home where you can regularly relax.
Whatever your circumstances, equity release loans could help you fulfil your retirement plans and ensure you have financial security or the means to really enjoy your retirement years.
