Equity release schemes: 10 points you need to know


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The Disinterestedness Release Council must approve your plans

1. You can stay in your home ground as long as you wish with any plan approved by the Equity Release Conference (ERC). 

2. With most schemes you can move home if you choose, subject to sure criteria, and transfer the plan to your new property. 

3. You may be barred from motile to properties such as a park home, or certain types of retirement growth. However, optional downsizing protection allows you to pay off the loan in this in the event without penalty. 

4. You do not have to make monthly repayments, the interest and excellent are repaid from the final sale proceeds of your home. Some sketches do allow you to pay off the interest to slow the speed at which your debt outs up or make a lump sum payment, typically up to 10 per cent per year. 

5. Popular drawdown plans consent to you to take the money in stages rather than as a single lump, with the help that you pay interest only on the money taken. 

6. How much you will sustain depends on factors such as your age, your property value, you and your sharer’s health and lifestyle, and the plan you choose. 

7. All ERC-approved plans have a no-negative judiciousness guarantee, so you and your family can never owe more than your nursing home is worth. 

8. Future increases in your home’s value may give you a maybe to release more equity, while a drop in value may restrict the amount of additional borrowing that may be available in the future. 

9. Equity release will diminish the amount of inheritance you leave to your family, because a chunk of your estate’s value will go towards paying off the equity release loan rather than. Some plans will allow you to guarantee a fixed percentage of your domicile’s value as an inheritance, so you can be sure they are getting something. 

10. The cash you unchain from your main home is free of tax, but may hit your entitlement to means-tested perks.

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