Is Equity Release Right For Me?
Equity release plans are lifelong commitments
You should always consider whether alternative options could be used in preference to equity release. These could include:
- Ensuring that you are claiming all benefits and grants to which you could be entitled
- Moving to a smaller property to release funds
- Getting assistance from your family
The benefits of equity release include:
- Being able to stay in your home
- Retaining your independence to make the most of retirement
- Releasing a cash sum that could make a difference to your retirement
Deciding on which plan is suitable for you can be a complex process, and it is a good idea that you obtain financial advice. In fact, we insist upon it. You can read more about the role of the financial adviser here.
What are my product choices?
There are two main types of equity release plan:
- A lifetime mortgage
- A home reversion plan
Please note that Hodge Lifetime only offer lifetime mortgages.
The key differences between these types of plan are explained below:
| Lifetime mortgage | Home reversion plan | |
|---|---|---|
| Contract type | Mortgage loan | You sell a share of your property |
| Key Features |
You are not required to make any repayments over the life of the loan Interest is added to loan and 'rolls-up' Repayment is due on death or moving to long term care No Negative Equity Guarantee. SHIP-approved lifetime mortgages guarantee that you won't owe more than the value of your home. |
The reversion provider buys a share of your property at its current market value, adjusted to reflect the expected term of your occupation When the property is sold, the reversion provider receives its share of the sale proceeds |
| Advantages |
You maintain ownership of 100% of your home You can benefit from future house price growth You can repay your loan at any time but you may incur early repayment charges |
You will always own your share of the property which you can pass on to your beneficiaries As there is no roll up of interest, control can be maintained over the percentage of the property remaining |
| Disadvantages |
As interest is added to the loan, you may not know what will be left for beneficiaries in the future |
You cannot reverse the transaction once you have sold a share of your property - this could limit your future options There will be no benefit from any future house price growth on the part of the property that has been sold |
These products are lifetime mortgages or home reversion plans. To understand their features and risks, ask your Financial Adviser for a personalised illustration.
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Find out more about our equity release products by downloading the following documents:
