Equity release: Your top tips to get the best deal

Increasing numbers of people aged 55 and over are looking into equity release as a way to fund their retirement plans. Indeed, the Equity Release Council (ERC) reports that there has been 14 percent growth in the number of loans agreed over the last three years. With this popularity in mind, we thought we’d take a look at the market and provide you with some top tips so you know where to start should you be interested in exploring equity release further.

1.Understand your needs

Have an understanding of what you would like the money for. This means you won’t borrow more than you need to. You could release from £10,000, up to 55 percent of the property value, dependent on the age of the youngest homeowner and value of your property. Once any outstanding mortgage has been repaid, the money that you release is yours to spend as you wish.

2. Contact a specialist

It’s important that you speak to a specialist equity release advisor to give you advice. Some advisors are tied to particular products, but through the Express Money Equity Release Service you will get access to advice from the whole of the market. This is because work with the UK’s largest equity release broker, Age Partnership1 who have access to exclusive plans and rates not available to other advisors.

3.Make an informed decision

Your advisor will help you understand all of your options, including alternative methods for accessing the money, such as downsizing or a standard mortgage. They will tell you everything you need to know about equity release, including the effect on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected now or in the future.

4. Get a personalised quotation

Your advisor can provide you with a personalised illustration for your borrowing needs, which outlines the features and risks involved. Through our service, the quotation is free and you are under no obligation to proceed. Only if you then choose to proceed and your case completes would a typical fee of 2.25 percent of the amount released be payable (minimum £1,695).

Equity release may involve a home reversion or a lifetime mortgage, which is secured against your property.

Equity release requires paying off any existing mortgage. Any money released, plus accrued interest would be repaid upon death, or moving into long-term care.