After years of working hard to make monthly mortgage payments, your home is likely to be your biggest asset, particularly, if you’ve benefited from an increase in house prices over the last few decades.

The value of your home (minus any existing mortgage and other loans secured against it) is referred to as equity. This equity is often passed on as an inheritance. However, an increasing number of people are tapping into some of this value to help boost their retirement finances or help their children get onto the property ladder. If you’re wondering if equity release is right for you, you’re in the right place.

What is equity release?

Equity release is a way for homeowners aged 55 or over to release tax -free funds from their homes without having to move.

With a lifetime mortgage (the most popular type of equity release), there are typically no monthly repayments to make as the loan, plus roll up interest, is repaid when the plan comes to an end. Usually, that’s when you, or the last remaining applicant, either passes away or moves into long-term care.

With a lifetime mortgage, you’ll still retain full ownership of your home. The money can be released to you as either a single lump sum or as an initial release amount, then further releases can be taken as and when needed, known as a drawdown lifetime mortgage.

With a lifetime mortgage, you have the right to remain in your home for as long as you choose to, or until you move into full time residential care or pass away. You also have the freedom to move to another property and transfer your loan without an early repayment charge (subject to the new property being acceptable to your lender at the time).

You will never owe more than the value of your home with the no negative equity guarantee.

The money can be used for a variety of purposes, and is often used for:

• Repaying an existing interest-only mortgage at the end of its term
• Gifting to family or providing them with an ‘early inheritance’
• Home improvements
• Taking the holiday of a lifetime