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What is Equity Release?

Posted on: 25 February 2020 by Key Equity Release

We all have questions about equity release. For instance, what is it?

Over the last 20 years, house prices have trebled in parts of the UK and doubled in other areas*. That’s why many homeowners are unlocking cash from their home with an equity release plan.

In 2019, Key customers had access to an average of £90,374** from their homes, they used the money in a variety of ways, including paying off their existing debts, gifting money to loved ones, or making home improvementsYou should always think carefully before securing a loan against your home.

The amount you could release from your home can depend on a number of factors such as the value of your property, your age and your health and lifestyle. With Key Equity Release plans, there are a range of flexible features meaning you can ensure you get a plan that’s right for you.

Lifetime Mortgage

Key Equity Release offer lifetime mortgages only, which is a loan secured against your home. With a lifetime mortgage, there are typically no monthly repayments to make as the loan plus roll-up interest, is repaid when the plan comes to an end.

You can take out a lifetime mortgage as a lump sum or drawdown plan. The drawdown plan works the same way, but you can choose to take the money out in smaller stages across a period of time, after your initial lump sum. Interest is only accrued on the money you have taken out so, over time, this can reduce the overall cost.

Partial capital repayments

Make voluntary, ad hoc repayments between 10-12% of the initial amount you’ve borrowed each year and reduce the size of the loan on which interest is charged.

Early repayment charges

The majority of our plans have fixed early repayment charges, so you will always know what the charge will be should you wish to repay your loan early.

Downsizing protection

If, for any reason, you need to move to a smaller home after five years of taking out a lifetime mortgage, you can pay the loan back without incurring an early repayment charge if the new property does not meet your plan’s criteria. 

Inheritance protection

With some Key Equity Release plans, if you want to be able to guarantee an inheritance for your loved ones, you can ring-fence a portion of your property's future value with a protected lifetime mortgage.

Enhanced Plans

Enhanced lifetime mortgage plans enable you to release more money from your home if you or your partner have any health or lifestyle conditions that may affect you. This could include health conditions such as diabetes, heart issues or if you smoke.

If you are thinking of releasing cash from your home, it’s important to speak to a qualified equity release adviser to make sure equity release is right for you.

With over 20 years’ experience, Key has helped over 1 million people decide whether equity release is right for them. A qualified, expert Key Equity Release adviser can arrange a consultation with you. Your adviser will provide transparent and personal advice. And if equity release isn’t right for you, we will tell you.

To safeguard your health, our expert equity release advice is now available in full over the phone, so call us free to find out more on 08082080963.

Remember, equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.

Why not calculate how much you could release from your home, or request a FREE Guide.

* Nationwide House pricing index Q4 1999 - Q4 2019
** Key data - full year 2019
 

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