Release Equity From Your House in the East Midlands 

Equity release can let over-55s put money towards family members’ deposits or take the holiday of a lifetime without moving house. In fact, a new study by Nottingham Trent University found that equity release loans have doubled in the past 10 years. However, it’s wise to find out what happens when you release equity to avoid unintended consequences down the line.  

In this guide, we explain how to release equity from your house in Market Harborough, Uppingham, Oakham, Stamford and the surrounding areas, and answer commonly asked questions. 

Equity release – what is it?  

Releasing equity from your home, meaning living on at the property while accessing the money tied up in it. With average house prices in Rutland rising by over 85% in the past 20 years, according to Land Registry data, it may be tempting to make use of that equity. However, releasing equity from your house can decrease the funds available in later life and as inheritance. 

How do you release equity from your house?  

Equity release can take two forms: a loan against your property’s value less outstanding mortgage borrowing, or selling all or part of the property to a provider. The provider will issue a cash lump sum or regular payments known as drawdown. 

Types of equity release explained  

There are two types of equity release scheme, lifetime mortgages and home reversion. Products that meet Equity Release Council standards can offer greater transparency, but it’s best to consult a financial adviser. 

Lifetime mortgages 

If you are aged 55 or over, lifetime mortgages allow you to borrow against your property’s value at a capped or fixed interest rate. Repayments can be capital or interest-only, however, compound interest could increase the amount you owe over time. 

Home reversion plans 

A home reversion plan allows over-60s to sell a portion of the property to the provider, usually under market value. You can live in your home rent-free until you pass away or move into long-term residential care, and proceeds are divided upon the property’s sale.  

Alternatives to equity release   

If you don’t want to pursue equity release, or are under 55, alternatively you could downsize or remortgage to release equity. Retirement interest-only mortgages (RIOs) are another option similar to equity release for over-55s, offering a cash lump sum in exchange for monthly repayments. 

The pros & cons of equity release   

There can be benefits to equity release, yet the potential risks are worth careful consideration. 

Pros 

• Continue living in your home 
• Gain access to immediate cash 
• Fund renovations or home improvements 
• Pass on money to your family now 

Cons 

• Limited to homeowners aged 55 and over 
• Downsizing can be practical for other reasons 
• Not realising the property’s full market value 
• It can complicate future care plans 
• Risk of losing eligibility for means-tested benefits 
• Debt can build up over time 
• It can significantly reduce the inheritance you leave behind 

Questions about equity release  

We answer some of the most frequently asked questions about equity release. 

Selling your property?

Making the most of your property’s value can be a delicate subject, from both a financial and an emotional standpoint. However, it can help to discuss your situation with a professional. If you are considering the options for your property in Leicestershire, Rutland, Northamptonshire or Lincolnshire, King West can help.