More and more people are applying for equity release plans, unlocking the cash tied up in their homes to make retirement more manageable or to pay for something they’ve always wanted, like a home renovation or a holiday property.
Why Is Equity Release So Popular?
Equity release interest rates are at the lowest point they have ever been, which is why more people every year are applying. Debt numbers also continue to rise, which means more people are looking for ways to clear debts before retirement.
Equity Release interest rates are incredibly low, between 3% and 5% and you can guarantee that you can stay in your home for life, and the chance to clear debts or pay for a dream retirement.
Continue reading to get the full details about why more people are turning to Equity Release.
- – Equity Release while have bad Credit
- – What happens to your Equity Release if you die?
- – What are the Equity Release time frames?
- – What are they Equity Release associated costs?
We update all our guides regularly. If you are researching Equity Release and we haven’t got an exact guide that helps you, keep coming back as we update daily.
Equity Release: People Are Living Longer
As we live healthier lifestyles and advances in science and medicine make illnesses more treatable, the population is living longer. And while this is fantastic news, it does mean that people are having to budget even more stringently to make sure they can afford to live.
An equity release plan could help – by releasing money tied up in your property, it could provide you with a much needed boost so that you can afford the everyday essentials for many years to come.
Whether you opt for a lifetime mortgage with a cash lump sum, or home reversion plan with regular income, it could ensure you have enough money that you need to live comfortably alongside your pension.
According to the Equity Release Council 37,000+ people used Equity Release schemes in 2018, releasing over £3.06bn from their properties.
Equity Release: Interest Rates Have Never Been Lower
Another reason equity release plans are becoming more popular is that they’ve never been as attractive – Equity Release interest rates are the lowest they’ve ever been. Depending on your circumstances you could now get a lifetime mortgage with an interest rate of less than 3%, with the average now at 4.5% too.
With various options available to help keep interest costs down, such as drawdown mortgages or the option to repay interest, it’s now more manageable than ever to take out an equity release plan and still leave behind a sizeable inheritance for your loved ones.
Equity Release: Stay in Your Home for Life
Regardless of whether you choose a lifetime mortgage or a home reversion plan, you are guaranteed to be allowed to live in your property until you require full-time care or you pass away.
So you can enjoy your money without the threat of losing your property and having to upset your lifestyle.
Equity Release: A Tax-Free Lump Sum
An equity release plan gives you a tax-free cash sum, with no requirement to make immediate repayments – instead, it’s paid back from your estate when you go into care or pass away.
That means an equity release plan could be your opportunity to remodel your house just as you’ve always wanted it or buy that caravan by the seaside. If you’re paying off debts, it can clear them, and let you live without the worry of budgeting for credit cards or personal loan payments.
There is a wide range of reasons why equity release plans are getting more popular, but at the same time, they aren’t for everyone. You should always seek financial advice first from a professional – indeed, no reputable lender will let you apply without it.
Quick Equity Release FAQs
Home reversion plans are, in essence, a means of selling a share in your property to an investor, in exchange for payment. There are no repayments, with the investor receiving their share of proceeds when the property is eventually sold.
The Equity Release Council is the industry body which represents equity release providers, qualified financial advisers, solicitors and intermediaries. Equity release is a growing sector, especially for older homeowners who may have limited access to finance.
You need to be at least 55 years old to apply for equity release in the UK. If you are planning to make a joint application, this applies to both of you.
Equity release drawdown works by giving you the value of your loan as a pot that you can make withdrawals from. You’ll only pay interest on the money you decide to withdraw.
How Can Money Savings Advice Help You With Releasing Equity?
Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already helped thousands of people get the best Equity Release deal and they can do the same for you.
Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.