What is equity release?

Equity is the difference between any mortgage you may have and the value of your home. Equity release is a way of unlocking the value of your property, without having to move home. It is used mostly by older homeowners who either have paid off their mortgage altogether or have only a small amount left to pay.

You can release the value of your home to give yourself a lump sum or a regular income (or both). If you live in the property until you die, the money from its sale is used to pay the lender before anything left over is paid to your beneficiaries. If you sell the property before you die, you repay the money you borrowed from the lender. With some types of loan you might also have to make regular interest payments.

This booklet gives some basic information about equity release and tries to answer some of the questions you should ask yourself and your advisers if you are considering this option. But this booklet is not a full guide, so if you are considering equity release you should also get expert financial and legal advice. Equity release can also affect the amount you are able to leave to your family or other beneficiaries after you die, so you may also want to talk through your plans with them.