Equity Release - Is it Right For you?

Whatever has led you to look into equity release, you should keep the following in mind

You can use the money however you like, but you’ll have to repay any existing mortgage or secured loan first
​Equity release will reduce the value of your estate. The money released is tax free, however it may affect your tax position. Our equity release advisers can explain further.

All of our advisers use specialist software to see whether equity release will affect your entitlement to any means tested benefits

The most common type of equity release, a lifetime mortgage, is a loan secured against your home.

You should always think carefully before securing a loan against your home.

​The other type of equity release is a home reversion plan. This involves selling all or part of your property to the reversion company in exchange for a cash lump sum.
 
Equity release is expected to be a lifetime commitment, so there are typically no monthly repayments. Instead, the loan plus roll up interest is repaid when you pass away or enter into long term care. Having said that, there are new products available that allow you service the interest costs and so avoid the effects of compound interest.

This also means that early repayment charges may be applicable if you decide to repay the plan early, these charges can sometimes be quite considerable. We will explain these in detail, including how the compound interest on a lifetime mortgage adds up and can grow quite quickly.

Fee Free Equity Release Advice

At KIS, we provide a full advice and recommendation service to ensure you get the plan most suitable for your situation. In doing this we will consider Early Repayment Charges, Interest rates, Servicing of Interest, Making Overpayments, Downsizing, Portability of the Mortgage, plus many other factors that you may want to consider.

Our service is completely free of charge from start to finish. Please see our section on charges so you understand how we get paid.

 
Your Family
 
Equity release will reduce the value of your estate, meaning it will affect the amount of inheritance that you’re able to leave. We recommend discussing this with your family members, or trusted friends before going ahead, and inviting them to join you at your appointments.

In many cases, family members are pleased to see how equity release will relieve financial pressure or help in other ways.

Consider all the options
 
Equity release is just one of a number of options that may be available to you. For instance, you may wish to consider the following alternatives

Using savings or other investments - If these don't meet your needs , you could consider looking into equity release as an additional means of raising funds.

Downsizing – selling your property to move into another which is smaller (or in a cheaper location). This may have associated financial costs, and can also be an emotional experience. However, your new home may be mortgage free, leaving you financially better off.

Asking friends and family for help - While this can be difficult, in many cases the people who care about you would rather help than see you struggle.

A traditional loan or mortgage - You’ll need to budget for monthly repayments; make sure that these are affordable before going ahead, but there are new products available like the Retirement Interest Only Mortgage, which could be more suitable for you.

Benefits Entitlement - Check that you are claiming all of the benefits that you are entitled to. There is more information at Citizen’s Advice and gov.uk. This is also something that we will check as part of our advice process, to ensure that you aren't missing out on benefits that you could be entitled to, but also to make sure that you don't lose entitlement to benefits by releasing equity from your home.

Consider your retirement options, such as how to use your pension pot to secure an income. You can get more information from the Government's PensionWise service.

Your Peace of Mind
 
We’re regulated by the Financial Conduct Authority; you can feel sure the advice you’re receiving follows strict regulations designed to keep you safe.

Plans that have been approved by the Equity Release Council follow a clear set of standards and therefore meet the required product standards, including

A no negative equity guarantee – you’ll never owe more than the value of your home.

The right to move home – if you move to a suitable property, then you can take your plan with you (subject to lender approval).

The right to stay in your home for the rest of your life, or until you need to move into full time, long term care.

Equity Release is a big step to take. Make sure you are talking to an adviser that will give you the time, information and knowledge that will allow you to make the decision that is right for you.